Last week, in the heat of the grand discussion on openness in social networks, I wrote in a blog post titled Is the trend to openness accelerating? Social networks as an inflection point:
I see the trend towards openness accelerating, which makes playing the lock-in game ever more difficult. I think that the current debate reflects that today there is far greater visibility for lack of openness in offerings, and less tolerance for that. What is currently playing out in the social network space is a fantastic case study that is relevant across all business segments. After MySpace dominating the social networking space, Facebook has shifted to the front very quickly, through openness in its APIs. It is at risk of having its leadership short-lived, if others quickly leap on to people’s preference for open systems, especially when it concerns their personal relationships.
However the more likely path is that Facebook sees the trends, and swiftly opens out its systems. Any incumbent is loath to shift to greater openness, but given the players and the landscape today, I don’t think that Facebook is not going to hold on too tightly for too long.
Looking back in a year or two from now, we may see that now was an inflection point in openness in social networks. We may also find that this shift has impacted many other facets of the information and businesses worlds. The jury is still out, but I think the evidence points to the current landscape being a manifestation of the acceleration of openness.
Today, just one week after I predicted that Facebook would open out, Dave Winer writes Facebook *is* opening up, noting that he’s discovered some new RSS feeds from Facebook, including a Friends Update Status, and Friends Posted Item. Paul Thompson says that the Friends Update Status has been available since last month, while Techcrunch says that this will win Facebook a lot of friends.
Providing RSS feeds for key information in Facebook basically means that you don’t need to go to Facebook to see your updates and information. You still have to maintain a profile in Facebook, and it will still be the platform for your social networks, but you are far freer in how you use it. One implication is it’s harder to monetize, as you can’t be sure of presenting advertisement to your users. However if being freer means you can maintain the role of predominant social network, you definitely will find other ways of making money, not least because the majority of an increased network will choose to interface to their network through Facebook.
Keynote speech on Creating the Future of Business
By Ross DawsonYesterday I gave a keynote on Creating the Future of Business at the Q400 Business Summit in Brisbane, which was themed Future Shocks. The feedback was fantastic; I’m hoping to be able to post a video of my presentation soon.
One of the key themes of my presentation was the Open Economy, in which everything is laid out open, across business processes, visibility, transparency, borders, industry boundaries and more. One of the stories I used was that of Goldcorp, which I told briefly in my book Living Networks, in the context of business applications of open source models:
Since then, the story has appeared in many different contexts, including being used as the opening example in Don Tapscott’s excellent book Wikinomics, and in Procter & Gamble’s internal communications promoting their open innovation initiatives. It remains a good inspiration for open business initiatives. It is told in more detail by Fast Company magazine.
Some of the other topics I covered in the speech were the acceleration of the global economy, how it is now impossible for businesses to hide, non-zero sum thinking, the role of competent jerks in organizational networks, and the characteristics of high-performers.
Facebook and portals in the workplace
By Ross DawsonFollowing close on the heels of SurfControl’s Facebook-is-costing-the-Australian-economy-$5-billion! story and some of the more balanced media response, Sophos, another internet security company, has released survey results saying that half of all companies restrict access to Facebook. Apparently 43% block Facebook outright, while 7% more give access only when it is deemed relevant. These figures may be correct, but without any methodology being released that I’m aware of, they are certainly suspect given the biased source of the data. I’m presuming that the figures are for the US only, as most non-US organizations are unlikely at this time to have explicitly banned Facebook, though its soaring international usage is putting it clearly on the agenda for corporate filters.
Interestingly, the survey apparently also noted that many of the other 50% of organizations were deliberately allowing Facebook either for the explicit networking value of the tool, or in order not to annoy their staff.
Richard MacManus has provided his usual insightful and considered views on the issue, noting that Facebook is effectively a portal that aggregates many applications, including many that are absolutely work-oriented. He points to an earlier post on Read/Write Web listing 10 work applications on Facebook among the hundreds of applications available, including To Do lists, Email, Calendar, Online Word Processing and Groupware. Of course the reality is that most people are using Facebook primarily as a work and social networking tool, and for many of the fun applications available within the platform, with work applications so far gettting little traction.
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“Facebook ban a little hasty”: counting the benefits of social networks to the enterprise
By Ross DawsonFollowing up on yesterday’s kerfuffle on Facebook in the enterprise, the Australian Financial Review has an article on page 3 titled “Facebook ban a little hasty”. While briefing mentioning the spurious numbers provided by SurfControl, they report that Pacific Publications, a major magazine publisher, has banned employees from accessing Facebook, while law firm Arnold Bloch Leibler blocks Facebook from 8am to 6pm. Apparently in the case of Pacific Magazines, bandwidth and system crashes were mentioned as reasons for the ban. They quote Bruce McCabe of S2 Intelligence describing their approach as “amateurish” and saying “it won’t work and they will eventually get over it.”
The article finishes by quoting me:
All in all, a rather more balanced view than the scare-mongering appearing in most of the media yesterday. From here, the task is to educate the corporate sector more on the benefits of effective social networks inside and outside the organization, and how best to support it.
I also did three radio interviews yesterday, in each case the story being the benefits to organizations of their employees using social networks well.
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Companies that close networking doors jeopardize their future
By Ross DawsonThere has been extensive coverage in the Australian media today about a press release from internet filtering company SurfControl, in which they make up a spurious figure that the use of Facebook on company time is costing business up to A$5 billion a year. This is based on 800,000 employees spending an hour a day on Facebook, numbers which have appear to have no basis other than the imagination of the report’s authors. SurfControl sells software to block employees using sites such as Facebook. Their vested interest has resulted in a highly inaccurate and distorted view of the use of social networks in organizations being presented in the media.
Of course, this is not to say that there aren’t plenty of company employees working on improving their social lives while they draw a salary.
However, the more important side of the story is that in a knowledge-based economy such as Australia, effective networking is absolutely essential to corporate productivity.
As a research leader at the University of Virginia’s Network Roundtable, the world’s premier organization studying organizational networks, I both do extensive research on networks in and across companies, and have access to the best research globally in the field.
Research at institutions such as Harvard and M.I.T. has consistently shown that employees’ personal networks are in many cases the single biggest factor impacting their productivity and ability to contribute to the company.
This is why organizations such as IBM, Procter & Gamble, PricewaterhouseCoopers and most world-class organizations I am aware of are focusing on how they can HELP their employees to network and build connections inside and outside their organizations, not hinder them.
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A rapidly growing advertising segment: compelling content people flock to watch
By Ross DawsonA few months ago I wrote a piece about new business models for content, sparked by a fascinating dream I had. In the post I mused:
Now the model of ads being presented as content is rapidly gaining prominence. People are not quite yet paying to watch the ads, but they’re certainly choosing to watch them. An article in the New York Times titled Now, the Clicking is to Watch the Ads, Not Skip Them and a piece in AdWeek called Ad Portals: Will Viewers Tune In? lay out some of the current and forthcoming offerings:
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Marketers accepting loss of control is on the way to the mainstream
By Ross DawsonA recent article in Smartcompany magazine titled Web 2.0: The risk, the reward, discussed the opportunities and risks of Web 2.0, focusing on the lack of control in marketing in the new online world. It quotes extensively from lawyers on some of the legal realities of dealing with negative commentary online, and then goes on to quote from me:
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The evisceration of traditional media – advertising flows to digital
By Ross DawsonThe naysayers of the dot-com era took particular delight in the demise of Henry Blodget, the Internet analyst at Merrill Lynch (where I used to work in the late 1980s) who was caught out promoting Internet stocks that he apparently privately thought were “a piece of junk” or “a dog”. As part of a subsequent settlement he is now not allowed to work in the securities industry. However Blodget continues to research the Internet industry on his blog Internet Outsider, where he has recently been writing provocatively titled posts such as Dead-tree media deathwatch: RIP Business 2.0, Running the Numbers: Why Newspapers are Screwed, and The Great Advertising Share Shift: Google Sucks Life Out of Old Media.
In this last post, Blodget analyzes the top 19 media companies (with supporting spreadsheets provided), indicating that advertising has shifted to online by 7% over the course of one year. The top-line figures are that US advertising at Google, Yahoo!, AOL, and Microsoft grew by $1.3 billion in the second quarter of 2007, while advertising at the 15 largest other media organizations fell by $280 million in the same period.
Or from another perspective, total advertising increased by 8% to $13.8 billion over the last year, with online increasing from $3 billion to $4.2 billion (23% to 30%), while offline advertising decreased from $9.9 billion to $9.6 billion (77% to 70%). Blodget comments:
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Media industry network analysis – tools for better strategic decisions
By Ross DawsonAmong the most powerful applications of network analysis is understanding industry structure and the implications for strategy. While this is still a relatively new field, we are beginning to uncover some very specific approaches and applications to industry network analysis. If you go to a large strategy consulting firm to provide strategy recommendations, you will get a thorough analysis of your industry. However this is almost always highly linear, looking at market shares, value chains, and industry trends. This hides the richness of highly interconnected industry structures. The next 5-10 years of strategy analysis will see a far greater use of network analysis to understand leverage points for
In the Future of Media Report 2007, we included some new analysis by Laurie Lock Lee. In the Future of Media Report 2006 we used Laurie’s analysis of shifts in media industry networks from 2001 to 2006, and earlier this year I featured some high-level analysis on the network structure of the Australian media industry. This new network analysis goes considerably deeper, analyzing the change in industry structure before and after a significant acquistion, by Macquarie Media Group of Southern Cross Broadcasting. An overview of the analysis is below. See the Future of Media Report 2007 for the full details.
There are a wide range of highly practical applications of industry network analysis. One, as illustrated in the example below, is analysis of industry structure before and after potential acquisitions or divestments by your company or your competitors. This can show the industry impact of major transactions, and provide further insights into their value. Another example in the media sector which we are currently exploring is examining the rich networks between advertisers, ad agencies, media buyers, and publishers. Viewing this from a network (rather than a simple market share) perspective enables very specific insights into how advertising spending can be shifted from one publisher to another. I’ll continue to post high-level views of some of this work and the kinds of benefits our clients are deriving from this.
MEDIA INDUSTRY NETWORK ANALYSIS: CASE STUDY
Laurie Lock Lee, Optimice
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Facebook begins to open up – recognizing and riding the inevitable trend
By Ross DawsonLast week, in the heat of the grand discussion on openness in social networks, I wrote in a blog post titled Is the trend to openness accelerating? Social networks as an inflection point:
Today, just one week after I predicted that Facebook would open out, Dave Winer writes Facebook *is* opening up, noting that he’s discovered some new RSS feeds from Facebook, including a Friends Update Status, and Friends Posted Item. Paul Thompson says that the Friends Update Status has been available since last month, while Techcrunch says that this will win Facebook a lot of friends.
Providing RSS feeds for key information in Facebook basically means that you don’t need to go to Facebook to see your updates and information. You still have to maintain a profile in Facebook, and it will still be the platform for your social networks, but you are far freer in how you use it. One implication is it’s harder to monetize, as you can’t be sure of presenting advertisement to your users. However if being freer means you can maintain the role of predominant social network, you definitely will find other ways of making money, not least because the majority of an increased network will choose to interface to their network through Facebook.
Media industry transactions are now transcending the boom years
By Ross DawsonIn our Future of Media Report 2007, we did an analysis of all media industry transactions of more than US$1 billion from 1993 to mid-year 2007. The transactions are not legible in the image below, so to get full details and analysis on the media industry transactions, click on the image for the complete Report.
Even at a high level of the general trends in activity, two things stand out. The first is the sharp rise in activity in 1999-2000, highlighted by the massive US$166 billion AOL/ Time Warner merger (remember that?), which still dwarfs any other transactions in the media sector, followed by a spectacular slump in activity in the following three years.
The second is how fast activity has risen in the last 18 months. Remember that the 2007 figures in the table are for the first half-year only. In fact if you take out the AOL transaction as an extraordinary one-off, there is a far faster pace of activity today than even in the boom years at the turn of the century. The question is, of course, whether this pace will be maintained or even accelerate, or whether it will again decline. While the answer is significantly related to stockmarket levels, since so much of the activity has been private equity-based, there is the potential for transactions to continue even after a fall in equity prices, as private equity firms snap up opportunities.