Content Theft Is Legal

I don’t care much about search engine traffic anymore. These days my business relies on other traffic sources. We run a fairly busy WordPress security blog and our readers are mostly folks on our large mailing list.

But we do get some search traffic and so now and then I’ll check in on how that’s doing. Today I wanted to see how one of our newest posts was ranking. It’s titled “Is WordPress Secure?“. The post is a question we get frequently from our customers and that a friend recently asked about – so I wanted to give our customer service team something to point to.

Seven days after posting I noticed the post was not ranking at all. It appeared to have been removed from the search results. For some reason I picked a random phrase in the post and Googled it and the problem became obvious.

Six websites had scraped our content verbatim, most of them including our images, and republished it without modification. They are all now ranking above us. In fact if you do a Google search for a phrase in the post –  “Think of your website as a giant dartboard and a hacker is trying to throw darts that simply have to hit the board.” you’ll notice that we appear below the ‘omitted results’ threshold and right at the bottom of the results.

I’m fairly confident this is a straight up ‘duplicate content’ penalty we’ve been hit with because we still rank #1 for our usual search phrases in our category.

It turns out this problem is not fixable in any practical sense. Google used to have something called Authorship which may have helped identify who owns content, but they cancelled this program back in 2014.

Now your only option appears to be to issue DMCA takedown notices to websites and hope they comply. This effectively makes content theft legal unless the author chooses to take action and has the resources to do so.

The result of this is what has happened in the adult film industry. MindGeek has become a monopoly through content piracy and leveraging the DMCA. They created or bought up sites that were pirating adult films. Content owners had to jump through DMCA hoops to get copyrighted content taken down. This was not feasible so they couldn’t keep up. The freeporntube sites became massively popular and profitable. Adult studios profits plummeted and MindGeek, the owner of the free sites ended up buying a ton of studios dirt cheap and became a porn monopoly. It didn’t help that the FTC isn’t exactly rushing to provide the adult film industry with anti-monopoly protections.

When you look at fox4online.com, one of the sites that stole our content, they make it clear they are more than happy to comply with DMCA requests with a “DMCA compliance” link in their footer:

Of course they are. The law favors them. We have to jump through their hoops and every other pirate site’s hoops to get our content taken down.

Google isn’t motivated to solve the issue because content pirates are likely to use AdSense, which gives Google a share of the profits. It makes no difference whether that revenue comes from the content owner or a pirate.

I’m curious how other publishers deal with content theft. If you’re struggling with this or have found a solution, please comment below.

Transitioning from Developer to CEO

I used to find it really easy to write. I didn’t know very much about business and wrote about startups constantly – so I probably suffered from Dunning Kruger effect. Don’t laugh, my blog posts back then consistently ended up on Hacker News’s front page.

These days I find blogging about business very hard. I work with a team of people who are smart and have experience and areas of expertise far outside my own. So my first thought as I try to dispense advice to other company founders is “Oh shit, so-and-so is going to read this and know what an idiot I am.”

I think most of my team may already  know how ignorant I am so I probably shouldn’t worry as much.

Anyway, to the point. I used to be a developer  – part of a two person founder team that for over a decade tried to create a business out of thin air, ambition and whatever capital we could scrounge up. At some point the engine actually sprang to life and started running and then quite quickly sped up.

These days we have a going concern with a growing team and whatdyaknow! An actual business on our hands.

Around early 2015 I made a hard transition into beginning to be a CEO as we hired our first team members. The team grew rapidly and today it ranges between 25 to 30 people. The business is busy, we have more than one business ‘division’, three execs, tons of financial throughput and lots going on.

Speaking

The transition from developer to executive or CEO can be quite challenging I think. To be a developer you need to disappear into your head for around 40+ hours a week and do that for years if you want to be a good developer.

When I’ve been coding for several days, I have found that my ability to communicate verbally suffers. I stutter more – I don’t actually have a stutter, but I have more verbal hesitation. When I’m “on my game” and have had plenty of phone calls and in-person conversations, I find communication easy and I have the ability to make it flow if it gets a bit stuck. I think this is one of the challenges devs face when becoming execs – they need to learn how to communicate and how to make it flow.

As a chief executive, you need to talk to teams or groups of people frequently. The conversation tends to be one sided because you are describing a vision, a goal, a challenge. Even when it is collaborative, you tend to be the one doing most of the talking in a room. You’re the facilitator. Being in many meetings a week where you have to play that role is an acquired skill, but I’ve gotten better at it over time and I’ve also gotten more comfortable with it.

When I started out and our team was just 5 to 10 people, I found our Monday team meetings and Wednesday product meetings quite tiring. We would have them at 10:30am and an hour or two later once the call wrapped, I was just finished. I didn’t have much energy left for a couple of hours until I recovered. As I did more and more of them, I found that they became easier, and then much easier. Now they energize me. It took about 2 years to get there.

Writing

Writing is one of the most valuable skills I think any exec needs. The ability to clearly articulate your ideas in individual or group emails, blog posts and documents is absolutely critical. I happen to enjoy writing. I don’t do much personal writing anymore – obviously trying to get back into it with this post. But blogging is, I think, what really helped me become a better writer.

Writing is also an acquired skill and a muscle that you have to keep fit. When I have written several blog posts over a period of weeks, I find things flow when I need to write another. When I’m rusty, the page is an abyss and the abyss stares back.

Writing is probably what connected me with the amazing early investors we had in Defiant (called Feedjit back then). It also served as a source of early marketing, gave me the ability to write compelling copy on our first website and today, writing is how I communicate with our team.

Leadership

I think leadership and power are often confused. Power is something desired by many. It is seductive and TV and film dramas are filled with scenes of people ‘flexing’ in some way. The fantasy of having someone bend to your will is irresistible if the ratings are anything to go by.

I think when it comes to inspirational leadership, power, a desire for power, the exercising of power and the confusion between power and leadership can be incredibly destructive and toxic for an organization. History has shown that accumulating power and using power devices and structures to manipulate people and groups can get things done. But I choose not to live that way and I don’t want to work for or be part of an organization that conducts itself that way.

My leadership style is still evolving. I’m relatively new to leading a team. I’ve only been doing it for about 3 years now. Perhaps that’s why I’m so willing to write about it – I don’t yet know how little I know. But I would describe my style as follows:

  • Know that there is much that you don’t know and many skills you don’t have and will never acquire. Get really comfortable with that. You’re a hilarious ass. Get over yourself!
  • Assemble a team of talented people who you trust and who are equally realistic about their strengths and weaknesses.
  • Trust your team. In other words, collaborate, and then give them the space they need to exercise their talents and to an amazing job.
  • Collaborate with the team to gather data and then come up with a shared vision for the organization. I find that having many conversations with no whiteboard helps because you are forced to clearly visualize in your minds eye the vision and path forward. That helps you and the team remember it.
  • Once the vision is clear, as CEO you are the custodian and keeper of that vision. It is your job to repeat it to the team when the opportunity arises. The way I do that is to describe where we are headed, why we are going there, how we will get there and what it will look like on Monday morning once we have arrived. [Kudos to my father who was a brilliant CEO and is a great strategic planner for some of that. Dankie Pa!]
  • I generally treat others the way I would like to be treated and the way I want my team to treat each other. I think that requires empathy because everyone has a bad day.
  • I try to create space in conversations so that others can fill that space with their intellectual contribution. I think this may have resulted in others in the organization taking the same approach to running meetings and collaborating.

I no longer code

These days I no longer write code. As with speaking and writing, code is a muscle and if you don’t exercise it, you lose it. If I look at code – usually when I’m evaluating a job applicant or understanding a new vulnerability or exploit – it takes me a few minutes to switch modes and get into the right head-space.

If you are a developer and become an executive or chief exec, I think that it comes with that sacrifice. You may not be the incredibly productive and talented developer that you used to be as you start using different intellectual muscles.

Delegating

I started my career in operations and did that for about a decade. Then switched to being a full-time developer. So I’m an ops and dev guy. I think that one of the things that is very challenging for technical founders who transition into being a CEO is that you have to step back and trust someone to do a job that is equal to or better than the job that you did.

Stepping back takes a leap of faith. It takes trust. To be completely honest, when Matt B  joined our organization as our first dev hire and I completely stepped back from being the only dev on the product, I actually could not believe the incredibly job he did from day one. I thought “Holy crap, the guy can code and I think he may code better than I do. And he works for us? What is a guy this good doing working for us?”

I think I had a touch of imposter syndrome. I felt like we weren’t a real company even though we were making quite a lot of money and that cash flow was rapidly growing. On a side-note, I suspect this may be why many founders go and raise money – they too suffer from imposter syndrome and by raising money from an investor it makes you a ‘real’ business.

Once Matt and Tim, our first two team members joined, I found that I had to delegate an increasing number of tasks as we hired more people and each time it’s a new leap of faith. You trust that the person you’re hiring is going to do a great job, take your hands off the wheel and every time I was surprised for some inexplicable reason that they did an amazing job.

These days I carefully monitor myself to make sure that I am giving our team the space they need. A day ago I was having a conversation with the team about something technical. It required the developers to discuss whether going a certain technical route was good for the organization, strategically. I initially started leading the meeting and I realized that I was creating an imbalance in the conversation. Because I’m CEO, I was dominating the room and even if someone held a strong opinion they might not voice it if it disagreed with something that I said. Or perhaps they would voice it but my opinion might carry the day by default. So I recused myself from the conversation and asked our lead developer to facilitate the meeting going forward and let me know what the team decides. I also explained why I was recusing myself.

Scaling

As we scale, leaders are beginning to emerge in the organization. This isn’t the kind of awkward “leadership ability” they teach in high-school where the noisiest or brashest or biggest kid is described as having leadership abilities. Because of the mutual respect we have for each other and the intellectual space we provide for each other in conversations, our leaders are emerging organically and in a very comfortable way. They tend to be the people that simply take on a particular role through passion or necessity or both and the rest of the team acknowledge them as the person to turn to when they have certain kinds of questions or need guidance.

I’m beginning to notice that as we scale, our team is in some cases having to go through the same kind of “stepping back” process that I went through. When we were just a handful of people, we all had many roles. As we grow, some of us are going to have to acknowledge that someone else needs to do a job that we used to do – and perhaps enjoyed very much. That process will be a challenge and we’re just beginning to see that emerge.

Going forward

I’m confident in my ability to continue to grow as a CEO and to grow with the team. We are not a public company working to goose a stock price and we are not a private company that has a high pressure board with a risk of executives being changed out if targets are not met.

One of the benefits of this is that it has created a culture within the company of knowing that it is safe to fail. Kerry (my wife and co-founder) and I failed many times for more than a decade before we created our current successful business. As executives, we are in an environment where we can do risky experiments using large chunks of our cashflow and we know that no board is going to fire us for failing.

Our team knows the same thing. We just started building a completely new department in the company and one of our team members has stepped up to lead that effort. She knows that she can take a risk, step out of her comfort zone and give it her absolute best shot and it’s OK to get it wrong. We’re all in the experiment together and if it doesn’t work out, we’ll just try a different way.

That’s it

If you are a technical startup founder or aspiring founder, I hope you have found this useful. You are welcome to comment here or shoot me an email at mmaunder@gmail.com and I will do my best to respond to any questions.

How Leaders Influence your Reality

During the last several years I’ve had the opportunity to see great leaders in action and the misfortune to see great deceivers at work. Both have one characteristic in common. Many would call it charisma, but I’d like to expand on what I think that “charisma” thing is.

Pause for a moment. Think about the fact that you’re giving me the opportunity to paint a reality for you. It’s my perception of reality, but by taking it on board and fully understanding the way I see things, you’re giving me the opportunity to mould and shape your reality. If you read this whole blog entry you’re going to have devoted a full 2 to 5 minutes of your conscious thought to my perception of reality. And whether you like it or not you’re going to take some of it on-board.

Great leaders and great deceivers are given a constant flow of opportunities to project their perception of reality and their vision for a future reality on large numbers of people. They alter the way a large group of people see the the world and the way these people think the world should be.

Ever wondered why Germany followed Hitler? Those screaming German speeches weren’t gibberish. They were rousing calls to arms with a believable and powerfully delivered rationale behind the call.

These speeches, or put in different terms, these opportunities Hitler was presented with to impose his perception of reality and his vision for a future on large groups of people, allowed him to influence an entire nation to go to war and eventually carry out some of the most awful atrocities in history.

So the lesson would appear to be “be careful who you lend your ear to”. But it’s a little more complex and more difficult that simply being careful. When others acknowledge someone as a leader, celebrity, genius, as talented and so on, it has a big influence on us as individuals and our default behavior as Cialdini writes in “Influence”, is to go along with the crowd.

“You say his a violin virtuoso, well he must be”, “You say this is a ’82 bottle of Latour’, well it must be spectacular”.

On a side-note, a friend once did an experiment where he sabotaged an already open bottle of excellent wine by decanting it and pouring in a very cheap wine. He watched the wine enthusiasts drink the sabotaged bottle and rave about how clearly excellent the wine is.

Social proof is a powerful phenomenon and if a group of people or respected organization acknowledge someone, they’ve given them a platform for “reality influence” or to create a “reality distortion field” if you’re a Steve Jobs fan.

If you’re a leader, I hope you’ve gained a greater understanding of how privileged you are to have the attention of groups of people. If you’re a listener, I hope you’ll learn from history and be careful who you grant access to your vulnerable and valuable attention.

 

A Viable Business Model for Facebook

Facebook’s second quarter revenue is expected to be $1.1 billion. That would give them roughly $4.4 billion per year, not exactly a number that justifies the $100 billion market cap they were/are hoping for. Compare that to Google’s $37 billion last year with current $200B market cap and Facebook isn’t even a player yet.

The endgame has arrived and the whole world is on Facebook today. Those that aren’t are seen as eccentric and are beginning to get depressed about losing touch with their kids.

What business model would make sense for Facebook now? Clearly advertising isn’t cutting it. They have a problem of “intent”. People go to Google to find things and if those things are in an ad, they click that ad. With Facebook the only intent is to “facebook”, not find a plumber and potentially click an ad. So as far as I’m concerned advertising will never work for Facebook.

So what should they do? Well, for starters, they have a dossier on just about every literate person on the planet with Internet access. Their data extends beyond just their own website facebook.com. They have data on most of the websites their members visit and what those members do on each website. They know who you are, where you are, who your friends are, who their friends are, where you were born, what you and your friends look like, who you communicate with most frequently, what you like, which websites you visit most frequently, how you get to those websites,  which pages you visit on those websites and all the usual demographic cruft.

In short, Facebook is the most complete and most current database of dossiers on individuals globally that the world has ever seen and it’s effortlessly updated in real-time.

So who might be interested in that? Any intelligence agency on the planet. Is there any money in that? Lets find out.

The Department of Defense in the United States 2013 budget is going to be roughly $525 billion. How much of that might they spend on surveilling people globally in real-time? Looking at the budget for the National Reconnaissance  Office (NRO), the guys who launch and manage our spy satellites, is instructive.

The NRO’s budget for 2010 was roughly $15 billion. If Facebook can also be considered a global array of data gathering nodes similar to our spy satellites, then surely $15 billion would be a reasonable number to throw around in a conversation with the folks who launch and operate the data gathering nodes?

And that’s one customer, albeit the largest customer. Remember that the USA has intelligence partners around the world. An example of this is the five signatory states in the UK-USA signals intelligence sharing agreement which are: USA, UK, Canada, Australia and New Zealand. All these folks have significant budget they can also contribute.

Another budget item that might be instructive to look at is the cost of ECHELON which is not public data. But the scale, size, importance and multi-decade nature of the project (started in the 70’s and still going strong) is a good illustration of how seriously the USA and it’s partners take signals intelligence and the scale of the budget available for it.

To be a “Google”, Facebook would have to bring in $40 billion a year in revenue which would take them to Google’s valuation of $200 billion. Right now they’re stuck at $4 billion a year.

Facebook is the only social network that matters and will be forever thanks to it’s network effect. It’s hard to believe that the smart people Facebook keeps gobbling up haven’t considered chatting to the global intelligence gathering and cyber security community. The data they have is game changing and something the global SIGINT community would never be able to gather on their own.

Trying to visualize the conversation Zuckerberg might have with the global intelligence community, it reminds me of a quote by Richard Gere’s character in Primal Fear who is a famous defense lawyer describing the conversation he has with new clients: “Have you been saving up for a rainy day? Guess what? … it’s raining!”

Footnote: There is the hard problem that publicly working with the intelligence community would kill Facebook. But then the intelligence community has never been very public and one wanders if there are ways to productize the desired data into something that appears benign and have contractors buy it on the agency’s behalf. Food for thought.

Unemployment is lower? Bull.

Last Friday and again today the DJIA got a nice bump from data showing unemployment has dropped from 9% to 8.6%. This number is known as U3 and only counts those actively looking for work. U4 is what the government should publish which counts U3 + those who have given up looking.

We “added 120,000 jobs in November” and have added over 100,000 jobs per month for the last 5 months.

I found the birth, death and marriage rate on the CDC website. For December 2009 we had 344,000 live births per month, 216,000 deaths per month and 138,000 marriages per month.

Our population is increasing by roughly 128,000 per month, which is 8000 more than the number of jobs we added. Looking at marriages per month gives you an indication of how many new couples are starting life and presumably expecting full employment. That’s 18,000 more than the maximum number of jobs we added per month in the last 5 months.

I don’t think we’re ever going to get the jobs we lost back because the financial crisis of 2008 was a trigger that caused companies that have become more efficient to cut a workforce that is no longer needed. That is why corporate revenue has not declined even though unemployment has increased. The grey marks the recession, click the graph to go to ycharts for a live version.

The only way to solve this is to bring our education syllabus up to date. The chinese have a few ideas how to do that: They’re cutting majors that produce unemployable graduates. 

Most vendors lie, but not all

I’ve been running a small software company for a while now and we are fastidious about reducing costs on hardware and software and getting the maximum bang for buck out of what we buy. Lets put it this way, Hell for a Dell server is spending eternity in our data center. We work them at 80% load until they simply drop dead and then we switch out the dead components and keep pushing them.

During my roughly 20 year career in IT, Ops and software engineering there is one thing that has been universal and consistent. IT vendors lie through their teeth about ROI and how their product will save you money or make you more money.

  • Buy our OS because it’s “enterprise” and “best of breed”. No thanks I’ll use Linux which is free and better.
  • Buy our database “solution” because it’s a new paradigm in “scaleability”. No thanks I’ll use MySQL because it’s better and it’s free and you know this which is why you bought them.
  • Use our translation service. Why translate once for a fixed low price when we can use it as an excuse to move your I18N pages into the cloud and charge you per page served. [Two companies have now pitched this exact service to me]
  • Why pay $12.99 for an SSL certificate when you can pay $1,499 for an EV SSL certificate that will quadruple your conversions.
  • Why buy 20 servers for $50k and lease your own rack for $3k per month when you could be in our “mission critical” cloudified data center spending $20K per month for the same thing.
  • Why use Nginx free for load balancing when you can get this dedicated hardware balancer hardware for $40K that can barely keep up.
It goes on, and on, and on. I am so easy to sell. If you can make me more money or save me money, I’m interested. But few salespeople who pitch me have a product that can do that for real. The only possible explanation is that true innovation, the kind that helps deliver more value or improve efficiency, is rare.
Companies that do deliver commercial products with real value or improved efficiency that I use:
  • Dell servers
  • *my hosting provider who shall remain nameless for security reasons* Email me if you’re interested.
  • Websitepulse for server monitoring. Super reliable and cost efficient.
  • Linode for small virtual servers for dev and little projects.
  • Apple for iMac workstations, iPad2, iPhone and their macbook and macbook pro – we have all of these and besides being pretty, we use every one of them every day.
  • Authorize.net for payment processing
  • Chase Bank. Their business banking is superb and if you’re a disciplined credit card user who has a history of not paying a cent in interest, get the Chase Saphire Preferred card – it’s Visa Signature so it has concierge and it has the best rewards in the biz. But beware if you aren’t highly organized because the interest can ratchet up to 29.99%. We’re considering ditching Amex rewards cards (biz and personal) for these. American Express you can contact me if you want to know why.
  • Intuit products including Quickbooks and Mint. Spectacular for biz and personal financial management.
Post in the comments if you have a favorite vendor that has really come through for you.

 

Trial, Error and the God Complex

My new favorite economist Tim Harford did a great TED talk recently chatting about our assumption that an expert approach is needed to problem solving. He argues that instead we should rely more on trial and error, a method that has proven very effective both in nature and business.

 

If the loading animation won’t disappear then try viewing the video on this page.

The relative non-risk of startups

Based on recent events I suspect an investment axiom might exist that says: The further an investor is abstracted away from the underlying asset they’re investing in, the greater the risk.

This has been shown recently to be true with Mortgage backed securities, credit default swaps, the black box that is the hedge fund industry and even sovereign debt may qualify.

When you are shielded from your investment by layers of structure, marketing, repackaging and sales teams, you are too far away to hear the alarm bells when they’re ringing.

That got me thinking about the relative risk of being an angel investor in young companies. Angel investors meet with the founders, use the product and in many cases craft the investment terms themselves. Spending a few weeks negotiating a deal with an entrepreneur is itself a revealing process. The investor is exposed to a mountain of data on the underlying asset they’re investing in.

The recent excellent Bloomberg article on the under performance of commodity ETF’s brought this difference home for me. Suited and booted bankers sell commodity ETF’s daily with a prospectus that tells you you’re investing in gold or oil or copper. The impression created is that you’re investing in the underlying asset when in fact you’re investing in a fund that is trading monthly futures contracts for the commodity. Two years later you’re left wondering why your investment has lost 20% while the underlying commodity has gained.

The complexity of financial products and the distance between the average investor and the underlying assets they’re investing in has, I believe, peaked. As the financial crisis that was started in 2008 continues to play out, during next decade I strongly suspect there will be a return to less complexity and a desire to know, touch and meet with the assets that underlie each investment.

While the likelihood of failure in young businesses is high, as an angel investor you know exactly what you’re getting and you have the ability to influence the performance of your asset. Try finding that on Wall Street.

The Coming Social Advertising Revolution

Facebook has over 400 million active users and members spend over 951 man-years on the site each month. Facebook is passing Google this year as the most visited site in the US and is going to earn somewhere between $710M and $1.1B in revenue this year.

Google on the other hand have a $27B revenue run rate for 2010 [based on Q1 2010 earnings]. With similar on-site traffic they are doing 25 times Facebook’s revenue. Google have had a long time to learn about printing money efficiently, but even so that’s a blush-worthy statistic for the Facebook executive team. So why the difference in performance?

Facebook has a crisis of intent. When a visitor signs in to Facebook their intent is to socialize. They don’t want to buy anything and they certainly don’t want to click on ads that lead them to buying something. Facebook has the best data on the web about the people using their service. But all that wonderful data is useless without intent.

When a visitor hits Google their intent is to see something, learn something, do something etc and these can be cajoled into buying decisions. If Google guides the user to the right vendor, they make a vendor money and can share in some of the revenue. Google’s data on each visitor pales in comparison to Facebook. But Google catches each visitor at the moment they have intent. And that is the power of the search business.

Facebook needs to solve their crisis of intent. Intent is the missing ingredient that stands between Facebook and $27 Billion in revenue multiplied by the social graph and profile data that Google doesn’t have.

Changing Facebook.com to capture visitor attention when they have buying intent risks destroying a valuable asset. So instead Facebook have decided to take their data to the places where visitors have intent: The rest of the web.

“If intent won’t come to Facebook, we’ll take Facebook to intent.” ~Mark Zuckerburg [may have said this]

In the next 3 to 12 months Facebook are going to roll out their own ad network for publishers – a direct competitor to Google AdSense.

If Facebook can use my interests, sex, age, location, who I’m friends with and their age, location, interests etc. to infer that when I’m searching for a ‘bobbin’ it’s probably because I want to tie steelhead flies with it, then it makes more sense for every publisher on the web to use Facebook’s ad network than Google or anyone else because they will simply make more money.

Facebook’s Ad Network will make publishers more money and increase engagement.

Facebook Connect was phase 1: “Lets see if a distributed Facebook gets traction and doesn’t raise privacy flags.” It was a resounding success.

The Social Web and Open Graph is phase 2: “Lets see if we can share some user data using an opt-out model.” From the Facebook blog: “For example, now if you’re logged into Facebook and go to Pandora for the first time, it can immediately start playing songs from bands you’ve liked across the web.”

There have been the usual privacy rumblings, but so far the Facebook community seems to be OK with an opt-out model of distributed data sharing.

The significance of this is staggering: Facebook have positioned themselves for the perfect AdSense kill-shot. 6 to 12 months from now publishers will  be able to integrate Facebook’s applications and ad network on their blog or website and get:

  • Better revenue than Google AdSense or any other ad network due to better targeting
  • Increased user engagement through social features
  • Increased virality through recruiting other Facebook members
  • Increased data on each visitor from their very first pageview reducing bounce.

Advertisers will get:

  • Less click fraud because you’re no longer just an IP address and a cookie.
  • Better targeting including the holy grail of demographics: Age, Sex, Location.
  • Ability to show your ad at the moment a user has buying intent on a search engine, a blog about visiting Egypt, etc.

A significant portion of Google’s $27 Billion in revenue this year will come from their publisher ad network. Google knows what’s at stake. That is why they are willing to bet GMail on products like Google Buzz.

Facebook is the most serious threat to Google’s business that they have faced. If Facebook plays this perfectly, they will kill the bear and 5 to 10 years from now will be the largest and most profitable ad network on Earth.

Anyone who plans to compete with them will have to do better than textual ad targeting.

PlatformFu for Hackers and Startups

Being over 35 has it’s advantages. Us old(ish) timers have lived through Microsoft using their platform to beat the hell out of Novell, Netscape, Real Player and others. Watched Eric Schmidt’s ascension from platform victim to platform player. And learned that platforms are honey traps that give good honey but you might get caught.

Twitter Investor Fred Wilson wrote a much talked about post earlier this week that sparked a discussion about whether Twitter would implement critical apps themselves. Seesmic founder Loic issued a stark warning to Twitter developers today. Apple continues to bar Adobe’s Flash platform from Apple’s iPhone platform and Adobe evangelist Lee Brimelow pulls no punches in his “Apple slaps developers in the face” post today.

Ten years ago a developer was faced with a much scarier platform landscape. You either build on Microsoft’s monopoly operating system and risk them implementing your app themselves, or stop being a desktop developer. Web Applications were really Web Sites, web platforms didn’t exist and mobile platforms were completely proprietary.

These days playing with platforms is a little easier because you have a range of platforms and integration methods to choose from. You can build a Facebook app that runs inside Facebook or integrate via FB Connect. You can choose to build on Twitter instead. And if you like you can integrate both to hedge your bets and add social features of your own on a completely external website. If you’re building a mobile app you have Droid and the iPhone to choose from and if both suck, well both platforms have a web browser so a lightweight web interface is an option too. Even in the desktop OS arena if Microsoft rubs you the wrong way there’s always the smaller but more spendy Apple market to go after.

When formulating your platform strategy it’s important to put yourself in the providers shoes and think about the following:

  1. Are they wildly profitable or is it possible they might go out of business or radically redefine their business?
  2. Have they figured out their business model yet or might your app become their model?
  3. Is their API locked down and unlikely to change or is it evolving as they figure out what business they’re in and how much of their revenue they want to give away via their API?
  4. Are they waging a strategic war with anyone that may affect your business and your app?
  5. Does any part of your own business compete with any part of their business? How about in future?

Being first to market on a new platform has it’s advantages. My former colleagues at UrbanSpoon got their iPhone app in an Apple ad because they were early adopters of the platform. Smart move – and smarter given that they weren’t betting the farm on the platform. But early adopters of the Facebook platform saw revenues and traffic change as Facebook evolved the platform early on.

So when building your app, first carefully assess the state of the platform and then decide how and at what level you want to engage it.