MySpace Moves, Facebook Surprises

Turn and Face the Strain

"Baby, I was never cool enough to get a job at a record store; but if I had, I
wouldn't want you anymore." - The Refreshments

We knew MySpace needed a new CEO. Small surprise, they picked the guy from Facebook who brought in all that dough from Microsoft. http://www.nytimes.com/2009/04/25/technology/companies/25myspace.html?_r=1&ref=technology.

Does this mean MySpace now starts to try to look and feel more like Facebook? And if so, which version of Facebook? The one that created all the buzz, flying to 200 members and gaining working professionals who are almost as likely to purchase a music store as they are digital music? Or the one that wants to be Twitter and that has initiated a large degree of denial and resistance among the faithful?

Swiftly, now, those "social media strategists" whose big idea is, "make a Facebook page for your business" can now turn their brains back on. This industry is nascent. Product quality across the board is poor. We are not anywhere close to having any sort of standardization. The lead dog will change. Cultures and demographics will continue to change. A stupendous amount of money has been invested by extremely large players in companies that can't, despite massive popularity and ubiquitous media exposure, settle on a revenue model that brings them to break even against their soaring infrastructure costs. Mildly problematic (he asked facetiously)?

Everything about the social media industry will change and change again. If you're telling your clients you have, "the answer," you'd best follow up immediately with, "for the moment." Letting your clients in on the fact that things are changing isn't good enough. To formulate strategies that position them--and you--to ride atop the crest of the change curve, you must be ready for the changes that haven't happened yet.


Look Out, You Rock and Rollers

One more chance, I'll try this time
I'll give you yours, I won't take mine
I'll listen up, pretend to care
Go on ahead, I'll meet you there - Blink 182

Why did Facebook accept the terms of service its users wrote despite the fact that turnout for the vote was so low? http://www.sfgate.com/cgi-bin/blogs/techchron/detail?blogid=19&entry_id=38986 Lots of reasons. Here are some:

1. Good business move. Worst thing you can do is alienate your customers.
2. Though turnout was low, margin was disparate. 74 percent of the vote? Obama didn't even get that.
3. A gift for the Facebook PR department, and an act consistent with Facebook's culture.
4. The only justification they had for going with the rules they drew up would be that their self-defined threshhold of 30 percent
   http://www.readwriteweb.com/archives/facebooks_site_governance_vote_a_massive_con.php wasn't reached. Imagine the uproar.

Okay, let's talk about these numbers. "In most online communities," writes usability guru Jakob Nielsen, "90 percent of users never contribute, nine percent...contribute a little and one percent of users account for almost all of the action. (http://www.useit.com/alertbox/participation_inequality.html)"

Quick math that explains a few things:

• If Facebook charged $1 per YEAR for a subscription, and it has 200 million users, that equates to a gross revenue bump of $200 million per year, right? Wrong. It's at best ten percent of 200 million, as a few users will quit due to (completely misplaced) outrage (that demonstrates our lack of ability to separate "entitlement" and "utility" from "business" and "luxury item." But I digress...) and the vast majority of the passive 90 percent would choose to forego the experience entirely if they had to maintain a subscription at any cost. What makes Facebook attractive to investors? 400 million eyeballs.
• It's safe to assume Facebook picked 30 percent--60 million--because they knew they were safe. Now they've done us all a favor. They've given the people what they want. They'll play their hits, not just the album cuts they're trying to promote. And maybe we'll cut them some slack about the new look and feel...
• The turnout was three tenths of one percent. Not even Nielsen's activist one percent turned out. This is a troubling item for Facebook's leadership.

They're Quite Aware of What They're Going Through

So, Facebook regains some legitimacy, acts like a partner instead of a distant corporation and prepares to do battle with one of its own. This is a fun ride, y'all. Keep kickin'.

With the possible exception of current macroeconomics, the ambiguous and omnipresent “Web 2.0” phenomenon poses perhaps the most currently perplexing quandary for small businesses. Many feel the former pressuring them to develop their presence on the latter. Additional pressure accompanies the uncertainty surrounding the newness of the medium, both in terms of the sheer array of sites and the differences among them. Small business owners, especially--and ironically as they are the ones who stand to benefit most from effective use of the medium--struggle with managing the time requirements. Finally, a universal set of questions is developing but the answer set is different for each participant. Should I blog? Should I Twitter? On which sites should I maintain a profile? How frequently should I update this profile?

This installment offers high level best practices and a look at the differences among some higher profile players.

So, really, what am I to do?
The good news is that for those with resources to invest, there are experts capable of putting you on the cutting edge in short order. And for those who are just scrimping by, a ton of free information is available. A good place to start looking for them is…where else?…the internet…In any event, here’s the high-level summary of what they’re going to (or should) tell you.

First, decide what you want Web 2.0 to do for you. Web 2.0 can eat your time like potato chips so beginning with an clearly defined end in mind is crucial.

Next, research. Learn the differences among the entities. Pick a few that give you access to your audience. Then, learn what features and options each of those offers, and at what cost.

Each entity will revolve around a “profile.” Building a profile for each of them will take time that should be spent selling. I suggest constructing standard content and storing it in a local document file so that you can simply copy and paste. When you update this file, then, repeat the copy and paste procedure. Some adjustments from site to site will be required but this will substantially reduce your startup and maintenance requirements.

Set parameters and self-imposed limitations for the use of the tool. It’s easy to get sucked in…and this indirect selling, while necessary, must take a backseat to direct revenue pursuits. What works for your strategy…Does it benefit you to establish yourself as a “best answers” person on Linked In? If so, budget 15 minutes or so into every other day for Linked In “Q&A.” Do you need to expand your network locally? Make sure you’re checking Meetup.com once or twice a week to see what groups have been started or are scheduling new events in your area. Email updates are available for these two examples…are you the type of person who gains or loses time by shifting notices to email? Set your notification tactics accordingly.

Facebook
As alluded to in the previous post, Social Networking sites are what magazines used to be: There are a few for most anybody and something for everybody. If you’re focused on international business, you’re a Xing person (who also needs a Linked In presence). If you have a consumer product, creating (a profile, and) a (free) Page for your business on Facebook is recommended. What is important to realize about Facebook is that it lends itself to personal social interaction. It is not a realistic expectation to separate your personal life from your professional life on Facebook. Your friends from high school will find you and send you silly messages. Are you any fun? If so, I say play along. In addition to the aforementioned Page opportunity, Facebook offers other business-oriented widgets. For example, I belong to a group on Facebook called “I’m an Entrepreneur.” Periodic updates from this group are often worthwhile.

Twitter
Twitter is a different animal: 140 characters to “Tweet,” which means to answer the question, “What are you doing now?” My advice for those of you who plan to answer this in a social vein (“Mike is doing laundry.”) are best off leaving that to Facebook. I use Twitter to post links to current articles of interest to my target audience and to promote this blog. On Twitter, people and entities “follow” one another. This means that if I am “following” you, every time you “Tweet,” I see it on my Twitter page. So: if I sign on to “follow” you and know more about when you do laundry than how your knowledge and connections can help my business, I will probably follow you for a very brief period.

Verticals
If you’re in TV, film or a related industry, Variety Magazine has a site called, “The Biz.” In essence, if you learn that there’s not a social network set up for your vertical, you might start one. But there’s a ton…Ning (not to be confused with Xing), Biznik, Bizwiki, Naymz (for job seekers), and of course MySpace (which still seems focused on high schoolers)… Again, pick your spots based on the access they grant to your target audience and the achievement of any other goals.

Seize this day.
Should you "Web 2.0?" Yes, definitely. As big companies pull back in the current economic environment, an enormous opportunity is presented for small companies to use these low- to no-cost venues to brand and proliferate their value propositions.

The Web 2.0 Conundrum

With the possible exception of current macroeconomics, the ambiguous and omnipresent “Web 2.0” phenomenon poses perhaps the most currently perplexing quandary for small businesses. Many feel the former pressuring them to develop their presence on the latter. Additional pressure accompanies the uncertainty surrounding the newness of the medium, both in terms of the sheer array of sites and the differences among them. Small business owners, especially--and ironically as they are the ones who stand to benefit most from effective use of the medium--struggle with managing the time requirements. Finally, a universal set of questions is developing but the answer set is different for each participant. Should I blog? Should I Twitter? On which sites should I maintain a profile? How frequently should I update this profile? And what does SEO stand for anyway?

This installment will address the industry at a high level. Future installments will seek to drill down into the medium: The players, best practices and examples of successes and failures.

What’s in a name?
This medium is simultaneously referred to in a number of ways. “Social Networking” and “Social Media” are two of its monikers; while these do accurately describe the core original purpose, they neither encompass the scope expansion already experienced nor are sufficiently medium-specific. “New Media” is simply too broad and problematic. Despite its ambiguity and because it seems the industry is trending toward using this nomenclature, I will in this and future installments refer to the industry as “Web 2.0.”

Regardless of market or medium, it is paramount to realize that presence without strategy and commitment are counterproductive. As with any medium (and with eternal thanks to Marshall McLuhan)--be it a brochure, radio spot or convention--your Web 2.0 presence is your message. Clarity, consistency and coherence are critical opportunity and risk areas into which we as business owners are compelled. As so much of business management is a search to minimize risk and uncertainty, best practice here is to research and understand the entities and options and choose a strategic path toward specific goals with a realistically manageable set of ongoing tasks…and embrace the notion that “ongoing” is the nature of this beast.


Past and Future
Prior to the proliferation of the internet, the magazine industry was the epitome of a low-risk, easy-profit medium. Cheap to produce and deliver with easily-identifiable and endless niche demographics, print magazines provide low, controllable barriers to entry and exit compared to electronic or daily print media. With the advent of the internet and its inevitable progression to user interactivity, we now observe the consequences of traditional media outlets who failed either to acknowledge or change the disruptive nature of the new medium. As the marginal price, for example, of a classified advertisement quite predictably made its way to zero, the already mature print industry stayed with its model…and now we observe shakedown which will eventually include the most hallowed names in the industry, tragically but perhaps fittingly with a whimper and without mourning. Magazines that have weathered the storm have done so by appealing to audiences of light- or non-users of the internet or by employing the internet and other media as strategic complements or reinforcements.

The primary lesson is that change must be embraced and acted upon, and strategically. Once upon a time a Bachelor’s degree gave a job candidate a significant advantage; now a targeted Master’s degree is a prerequisite for many entry-level positions. Because Web 2.0 is so easily entered and can be maintained at some level with little expertise, ownership within the sphere is a fundamental requirement at present. A secondary lesson is that, anymore, no medium stands alone. Interactivity is increasingly and irreversibly pervasive in all aspects of our lives.

The aspect with which I am currently most fascinated, and about which I fail to find consensus among experts, is the development of the industry. You’re about to spend valuable time setting up and maintaining your Web 2.0 presence; you need to know your horse will run for the long haul. Every industry (not just print media) reaches a point of maturity and experiences consolidation and shakeout. What will this look like for Web 2.0? Will the cycle be contracted in the same way the technology progressed? Or will it be extended by the virtually nonexistent barriers to entry and exit? What incremental innovations will prove defining differentiators?

I do think that big companies will be strapped to keep up; that this is a medium that rewards speed and the ability to change--two things larger companies either resist or simply cannot do. For any smaller operators with imitative, substitute or complementary products who can identify the whereabouts of their low-hanging fruit and beat the larger entities on cost, strike now. The iron is hot.

Here’s the “teaser.”
The next installment will begin to address best practices for strategic and tactical startup and maintenance. Until then, I recommend small business owners look into LinkedIn, Facebook and Meetup.com.

Get your message out!