May 4, 2007

On my first day of college I headed to the student newspaper and signed on to be a reporter. Other young activists on campus joined the student government or the radio or television station or a chapter of a political party.

That’s still going on to some extent but it’s more likely politically engaged students will be seated at their dorm room desks scanning social networks such as YouTube, responding to blogs — personal Web pages on specific topics such as politics — or creating online commentaries of their own.

When I walked into the California State Democratic Convention last Saturday in San Diego and saw all the bloggers, I realized that not only was I a Luddite, hauling around my ailing microcassette tape recorder, but that this trend of political blogging is growing like a kudzu vine, snaking around a dozen newspaper boxes … overnight.

Resources for Web sites

Of the 400 media credentials handed out for the convention, 49 were given to bloggers, and that doesn’t include the traditional journalists who have blogs of their own. The California Dems even have their own computer/Internet caucus. “The caucus is symbolic of just how big a phenomenon (the Internet) is here,” says Roger Salazar, spokesman for the California Democratic Party. It was the first time the California convention had set up a table specially for bloggers inside the hall where candidates spoke. In fact, one of the blogging groups, Calitics.com, had a bigger contingent — nine staffers — than any of the regional newspapers.

California is the domain of the Silicon Valley, after all, and home to many of the largest political blogs in the country — The Daily Kos and Huffington Post for example. (We have our own bloggers at the Sun-Times, including Lynn Sweet, Washington bureau chief.)

But blogging is also being embraced by most of the Democratic and Republican candidates in their attempt to catch the attention of the young. According to a study by Kristin Hanks, a graduate student at Indiana University School of Informatics, only 2 percent of campaign Web sites had blogs or “visitors’ comments” in 2002. Today, it’s 74 percent.

“The resources being expended on these Web sites are incredible,” says Brian Leubitz, founder of Calitics and a master’s student in public policy at the University of California at Berkeley.

Barack Obama’s director of new media, Josh Orton, says the effort is to “democratize what it means to be involved in a campaign.” On Obama’s page is a MySpace-style site — MyBarack Obama.com — where users can sign up to create their own blogs. There are now 11,000 individual bloggers.

Obama has about a dozen workers on his new media team, including one of the founders of Facebook, Chris Hughes. “Now people can organize regardless of geographical location, regardless of age,” Orton told the computer/Internet caucus. “It’s really broken down a lot of walls.”

Obama has his own videographer traveling with him so live action can be posted on his Web site. Inside the campaign there is a staff blog.

From Obama’s site there are also links to MySpace, YouTube and other social networking sites. This linking is called “blog rolling.”

(The other front-running Democrats, Hillary Clinton and John Edwards, have similar Web offerings.)

But sometimes things can go really wrong, as the Obama team found out when it tried to work with Joe Anthony, an enthusiastic supporter who started the page on MySpace in November 2004 for the candidate.

‘Early adaptors’

A tug-of-war erupted over control of the site between the Obama group and Anthony — who allowed the Obama team to edit the information on the page. MySpace executives negotiated an end to the dispute by dividing the spoils, giving the site name to Obama and the list of 160,000 “friends” to Anthony. Hanks at Indiana University recalls how she explored Republican candidate Mike Huckabee’s site and found a link to a MySpace search results page.

It led to a “F—Huck” site.

After doing a content analysis, Hanks determined the candidates’ Web sites don’t generate as much public discourse as one might expect, but they can mobilize people interested in politics.

“You don’t have to go to the door and you don’t have to get people to ‘sign here.'”

But Sree Sreenivasan, new media professor at the Columbia University Graduate School of Journalism, says the effectiveness of Web sites and blogs as political tools may only go so far: “It’s still a small percentage of people using these technologies.”

Most are young and what Sreenivasan terms “early adaptors.” And, as he concludes, the impact of young voters “is notoriously hard to predict.” It was thought they were going to turn out in big numbers in 2004 but that didn’t happen.

In the end, who has time to blog? After reading four newspapers each day and my e-mails and doing my work, I’ve had it. Blogging remains a luxury for the young — or the bored.

By David Needle

MONTEREY, Calif.– Social networks and other Web-based forms of personal expression are connecting people on the Internet like never before. No surprise there. Whether it’s with MySpace profiles or expanding your personal network of contacts via sites like LinkedIn and Facebook, people are reaching out like never before.

But at what point is it overkill, and which companies have the power and resources to ride out the competitive storms and emerge victorious? As far as Pierre Lamond, a general partner with the Sequoia Capital venture firm is concerned, we’ve already reached the saturation point.

“Very soon there will be enough social networking companies for each U.S. citizen,” he quipped during a discussion at the Red Herring conference here. “How many of these can people belong to?”

As for the broader topic of Web 2.0 (define) companies Lamond remained pessimistic. “We’re in Web 2.0 bubble in my opinion,” he groused. This from a partner at the firm that was an early investor in the likes of Yahoo, Google, YouTube and LinkedIn. Lamond fears the advertising on TV and billboards along Silicon Valley’s main Highway 101 hyping various Web firms are a bad sign, a reminder of the excessive spending ahead of profitability that characterized the dot-com bust at the turn of the century.

Mark Jung, former chief operating officer at Fox Interactive, also raised some red flags. At Fox, Jung was responsible for several Internet properties, including what became the wildly successful MySpace. For all the growth in user generated pages, Jung isn’t sure they’ll be sufficiently monetized.

He said publishers haven’t quite figured out how to capitalize on the passion of bloggers and other user-generated content sites. “There’s an assumption that the user publisher “thinks like a large publisher and is after profit,” said Jung. “In general, they don’t. It’s not always about money, but ego, personal fame and having an individual voice, not cash flow.”

In a traditional publishing model, the publisher controls the content and sets the ad rates. But in a Web 2.0 world, Jung said “the aggregator or publisher may not be in charge or in control of the inventory.”

Jung also said that as user generated content grows unabated, publishers and Web sites can’t even be sure of their architecture requirements or when and how much content is being posted. “What should your storage and network costs be when there are a hundred million unique pieces of content that could light up [i.e., become widely popular] at anytime? What if the content is offensive? Is a manual screening of a million pages realistic? If not, how could potential liability be covered?”

Jung didn’t offer any answers, then said it’s long past time for the industry to come together and address some of these issues. “As the long tail expands, we as aggregators become victims of our success,” he said. “Anxiety is building and tempers are beginning to flare.”

As for profitability, Jung had one shining example of a highly successful company that deals in user generated content: eBay. But he noted eBay really flips the model around. “eBay is different because it shares revenue with the consumer; in fact, the consumer pays eBay,”

Max Levchin, CEO of Slide and a co-founder of PayPal, which is now an eBay company, agreed with Jung in a later talk. “eBay has it down, everyone is making money right and left,” he said.

And there may come a day when participants in social networks want to see some of the green. Today users don’t get paid for creating profiles in MySpace or Facebook. But Jung wondered aloud whether competition or some other development will lead users to expect payment for posting their content.

“Today they don’t realize they should care, but when they do, you’ll see a huge structural shift,” said Jung. “If they’re not on your site, you don’t have a site.”

‘Facebook is the future… ‘

By Erica Ogg

Published: Thursday 3 May 2007

Social networks are the best way for companies to understand the future of how content will be distributed and consumed. That’s according to Dan Scheinman, senior vice president of Cisco Systems’ Media Solutions Group and the architect of Cisco’s acquisitions of Linksys and Scientific Atlanta.

During Scheinman’s keynote address at the US Digital Living Connections Conference, he talked about how digital media is disrupting the tech and entertainment industries. Usually that means talking about networking standards and media servers but Scheinman’s recommendations, instead, were a bit more pop culture than geek culture.

He said: “A lot of you should go spend time on Facebook and MySpace. Spend time to understand why social media really does matter.” Social communities are the solution to some of the biggest problems facing Hollywood and other content providers in today’s Digital Era, Scheinman said.

Though it may sound like an activity relegated to high school and college kids, social networking is going to be the avenue for marketers and media companies to reach consumers and enterprise customers alike, he said. The technology and entertainment industries are both being forced to change the way they do business because of what have mostly been consumer-oriented technologies.

Personal video recorders have changed the way marketers and advertisers get product messages to people. For example, though many consumers have the power to skip past a Coke commercial, the unexpected success of the Diet Coke and Mentos Experiment video made popular on YouTube affords Coca-Cola a whole new way of advertising products in a user-generated content environment.

He said: “It’s the beginning of a new era. Consumers are driving the next set of value creations. All the energy in tech industry is around consumer apps.” That’s evident by the success of Google, Skype, Yahoo! and YouTube, he added. And it’s completely different to how Silicon Valley has operated for the past three decades.

Ideas and businesses no longer move through the traditional pattern: from universities to banks to enterprise to service providers. Instead, they now go from universities to the consumer to service providers and then to enterprise, he said.

High-definition entertainment was in homes for years before it got into enterprise, he noted. Same with search and social networks. “Enterprise is last now. We have 1,500 employees on Facebook because we don’t have the internal tools to provide community,” Scheinman said. “A lot of the enterprise has been behind in adopting all these tools.”

Traditional content providers (such as Hollywood) are just starting to understand the importance of consumers wanting to share their media socially and on the devices of their choosing, he said. Consumers now have the power to do what they want when they want it (mostly) and Cisco is moving toward a consumer presence there. At this year’s Consumer Electronic Show the company announced it would be releasing Cisco branded products such as set-top boxes.

Scheinman added: “A giant IP network is what’s between content and user. That’s one of the reasons we acquired Linksys and Scientific Atlanta.”

The next-generation connected home has been promised for some time now but broadband adoption – now at 35 per cent in the US – is making it a reality, he said.

So many media choices for consumers has made Hollywood even more dependent on mass hits, he said. And the way to understand what consumers want? Social networks. “It’s the beginning of the solution to all of these problems. If you want someone to see your stuff and pay for it you have to figure out how you’re going to distribute it.”

That’s why News Corp’s acquisition of MySpace “was one of the most brilliant moves in the industry”, Scheinman said. “It is truly remarkable because there’s this massive community… people are spending three hours a day on MySpace. And [Rupert Murdoch] knows this is central to the question of what will happen.”

Though the picture isn’t entirely clear yet with how the connected home will come together seamlessly for consumers, or how traditional media leaders like studios and record companies will join in the new era of digital media, Scheinman is confident that increasingly democratised landscape for the advancement of technology is more fertile than ever.

He said: “There will be more value creation in the next few years than even in the bubble times.”

Erica Ogg writes for CNET News.com


May 4, 2007

Meet Tom–the brainchild, President, and Co-Founder of MySpace.com. We’ve pulled him aside to figure out why on-line social networking sites have become so huge, and what it is that makes them tick.

MZ: Social networking sites have become a phenomenon, what do you think is the fascination behind these sites? Why are they so popular?

MS: Well there’s something old here and something new. The old is that it’s simply socializing. Most everyone loves to socialize, and that’s what MySpace and other sites let you do. What’s new, of course, is the way you socialize, via the computer. I’m well-suited for MySpace, because I’m the sort of person who grew up socializing online – from the time I was 12 I was using a modem to talk to people via message boards and various forms of chat. For me, it’s perfectly naturally, and actually preferable in many ways to make friends online. Even today some of my best friends are people I met as a teenager in my room with my 300 bps modem. It’s preferable for a few reasons – I can meet different people then I’d meet in real life, and I can meet people while I’m doing something else. I’m not the sort of person to go a party or a club and mill about looking for new people. But I could be doing my homework, working, or anything on the computer and come across people that I can message and IM when I have a spare moment, and real friendships are formed that way. So these sites are becoming popular, I think, because the mainstream is realizing that socializing online is not just for “computer nerds.” It’s mainstream enough that we’ve got a development deal to do a reality TV show based on MySpace. That’s about as mainstream as it gets I suppose.

MZ: While Friendster was the first site to dominate the market, MySpace.com has emerged out of nowhere and has grown to huge popularity. How was MySpace able to do this?

MS: I think the unfortunate reality for Friendster is that their site just stopped working on them; it became unusable. I liked using Friendster but stopped when it got so slow that I couldn’t write to or browse anyone. MySpace appeared right when Friendster ran into its technical problems. Once the migration started, most users found they preferred MySpace. Nielsen Net Ratings showed that MySpace passed Friendster in traffic in January.

MZ: How many users currently use MySpace?

MS: Right now we have about 1.2 million active users.

MZ: What do you see in the future for social networking and MySpace ?

MS: As an industry, I think the 20 or so sites will disappear. I think only a few will last. No other site has really built up a user-base but MySpace and Friendster. The future of MySpace is bigger than one might imagine. We want to be a personal portal, where you share your life with friends. We see Yahoo, MSN and AOL as our competitors; I don’t really think much about the “social networking” space. I think about the big three portals. That’s where we want to be. It’s a lofty goal, that I would have never dreamed of attaining six months ago. But that’s what we want.

It’s interesting to note that users already spend more time on MySpace than they do on Yahoo. If we gave users all the features they are used to on other sites, why would they ever leave MySpace? I know MSN is trying to integrate social network into all their features. I don’t think it’ll be so easy for them. I like what we’ve got at MySpace – a social network as the base upon which we can integrate more features. I think we’ll be able to design a system that works better for people because we don’t have to destroy before we build, which is what MSN is faced with. You’d be really surprised, I think, to see some of the things we’re developing. I don’t want to tip my hand, but it’ll change how people use the Internet, I think.

MZ: How was MySpace created? By whom, and for what objectives?

MS: MySpace was a creative idea before it was a business. When we saw that it took off and we saw the costs would be enormous, we quickly realized we needed to make money or it would all disappear. So now it’s a labor of love that I think will also create a lot of jobs and an opportunity for MySpace employees and advertisers.

MZ: Do you have a company philosophy that you try to follow?

MS: We’re not real corporate here, so we haven’t sat around and come up with a corporate mission statement.

We don’t do user surveys. We don’t have policies and procedures. We didn’t follow the rules. That’s starting to change as we get bigger; I assume it will change quite a bit. Right now its pretty simple–we’re trying to make something cool!

MZ: One of the fascinating things about social networking sites is that they’ve been able to attract and keep the fickle young (18-35 yr. old) users. Why do you think these people are especially attracted to social networking sites?

MS: One thing I’ve noticed is how rapidly attitudes are changing about meeting people online. Before MySpace began, I thought most people under 25 were really not interested in meeting people from the Internet. I think it was going on, but I didn’t necessarily see it. Under 25 meetings was going on with computer geeks, smaller subcultures, or ethnic sites. I think that was true to a large degree, because most of the mainstream sites that provide a forum for people to meet were dating sites. That was the only option for a mainstream audience. Why would a 22 year old pay for or even use a dating site? Most won’t. But a 22 year old, who grew up with ICQ, AIM & the Internet is also much less concerned about privacy. The Internet is not scary to a younger person. Putting their picture up is not a “dangerous” proposition like it is for a 35 year old. And its not scary to me because I was ‘online’ when I was 12 years old. So my perspective is a lot closer to people who are 21 and younger–people who’ve grown up “online.” Most of our users are 30 and under. I think 24 is the average age. For these people who grew up online, its not “geeky” to use the Internet to meet other people. There just wasn’t a lot of it going on because there was no place for it in the mainstream. Some of the ethnic-oriented sites were the true innovators in this arena–sites like AsianAvenue and BlackPlanet. This is where the under-25, non-dating site set were meeting online. But MySpace has surpassed both these sites in traffic, and really opened things up on a wider scale. People are really looking for friends on MySpace, and making them. There’s also dating going on, bands starting. Users are finding jobs and finding out about new clubs. I think it’s so cool; I think this vibe is what attracts people to this site. It’s a new way to socialize that is rapidly changing and become more mainstream every day.

MZ: MySpace does not charge its users for the service, is this just during a “testing” period, or will MySpace try to always keep its services free?

MS: No, we’ve never been in “Beta” really. This is not a test phase. MySpace will never be static. We’ll be adding to it forever, so there’s no use in calling it “Beta.” We’ll have premium features some day, but everything you do on MySpace now will always be free.

MZ: Has MySpace been successful as a business venture?

MS: All businesses take time – and MySpace is a larger endeavor than it might seem. Because of my contact with users and personal, hands-on approach, people get the idea that the whole thing is run from a PC in my bedroom. Nothing could be farther from the truth. We have a very talented staff of 25 people working around the clock on MySpace and we’re still hiring. Right now I’d say MySpace is a success as a business and that its headed in the right direction. All indications suggest that over time it will be a wildly successful business. Advertising-based revenue models on the Internet have seen their ups and downs. Right now we’re in the beginning of an “up” phase, which I don’t think will be merely a phase. The Internet has enough penetration that the major advertisers realize its power for branding. They’re not afraid of it anymore.

MZ: Does and will revenue always come from advertising?

MS: Yes, right now it’s all from advertising. We’re going to add some very low-key premium features. No one thinks of Yahoo as a pay site, but there are plenty of things on Yahoo you can pay for. That’s where we’re headed with a premium feature model. The basic services people use now, will always be free.

MZ: You, Tom, especially seem very young to have such a large successful venture on your resume… How did you come about working with MySpace? Were you the primary founder? What background led you to doing and wanting this?

MS: MySpace was pretty organic. It was me who said “let’s do this,” but then I actually dropped out of the picture for about a month while a team of two worked on it. Once we had something tangible to look at, I stepped back in and it became a full-time job. I’m the President and focus mainly on the marketing and development of the site. Chris DeWolfe is CEO and co-founder, and he focuses more on the business aspect of things–contracts, legal issues, ad sales, partnerships. We have a great working relationship and each has the experience that the other lacks. My background is not in business. I came from a more creative background–I was an English major at Berkeley, a Film grad student at UCLA. I wrote books as a teenager and edited a journal of poetry & fiction in college, I wrote video game reviews. I was a singer in a rock band for about 10 years. I’ve first ran a community website from my home computer when I was 14. All these things led to MySpace–the emphasis on user creativity, the games, film and music sections. I wanted to create a community where artists could show their stuff. We’re just developing those areas now, but I think it’s what makes the site more interesting than a dating site.

With two million members (and growing), MySpace.com offers a multi-level entertainment opportunity involving blogs, instant messaging, classifieds, peer voting, special interest groups, user forums and user-created content. Is it popular? You bet: they have statistics that show the site receiving 35 million impressions per day at an average of one hour online per visit. So far, all MySpace services are free, with the site supported entirely by advertisers who are eager to reach exactly the young, web-savvy and web-social music fan that MySpace.com attracts.

Created by Chris DeWolfe and Tom Anderson, MySpace is already successful on a level that caught many industry onlookers by surprise. While the main MySpace site leads to pure social networking, the section of the site called MySpace Music is a revolutionary way to reach their built-in web audience of two million networked users, and has the potential of rapidly expanding beyond that already impressive figure. As a means of launching unsigned and emerging recording artists, MySpace Music is a formidible tool.

Inside the Minds of the MySpace Creators:

“MySpace Music is what MP3.com should have been, but never was,” Anderson said. “Very few people go to a website looking for bands they’ve never heard of. MySpace Music lets people find music online in the same way they find out about music in person: through their friends. Millions of friends come to MySpace to socialize, and through that process — word of mouth and recommendations of friends — bands get exposure to new fans and fans to new music.”

DeWolfe continues, “The most exciting use of MySpace Music is the way it’s changing the band-to-fan dynamic. A band can go on MySpace and find potential fans all over the country just by sending an e-mail and saying ‘Hello.’ Bands are developing followings and finding street teams online.”

Offering downloads, band web pages, and the ability to connect directly with artists is just part of the attraction of MySpace Music. Each visitor to the site also can participate via user testimonials and ratings. The artists are also able to access a wide variety of music business contacts.

Details from DeWolfe:

[The G-Man] What’s the history of MySpace?

Chris DeWolfe We launched the general MySpace site in September of 2003. Our vision was to create a portal where our users could mobilize and connect around shared interests — whether those interests be music, television, dating, nightlife, politics, religion or anything else.

[The G-Man] How does music fit into the MySpace network?

Chris DeWolfe Almost from the day we launched, music became one of the primary interests of MySpace users. We believe that most people hear and sample new music based on recommendations from friends. The network affect of our site (friends telling friends), allows new trends and music to spread very quickly. At the same time, bands began flocking to MySpace as a mechanism to promote themselves, find new fans, book shows, and even secure label deals.

[The G-Man] What are the revenue streams for MySpace?

Chris DeWolfe MySpace is currently supported by online advertising and sponsorship. We may add premium services later, but any service we currently offer for free will stay that way. We’ve been lucky to secure top tier advertisers such as Sony Music, Interscope, Warner Music, Dreamworks, Napster and others. The promotion works for these types of advertisers because most of our users are hip 18-34 year-old influencers who love music and frequently go to movies during the opening weekend.

[The G-Man] What are the advantages for artists using MySpace?

Chris DeWolfe Artists may sell their CDs on our site. The primary use so far has been for bands to mobilize new fans who they ordinarily wouldn’t have met. A band from Iowa can quickly develop a following in New York or Los Angeles. Additionally, bands use the site to book tours and fill venues. The MySpace social network is international. Because MySpace is an online network, it makes geographical boundaries less relevant.

[The G-Man] Can you compare the MySpace entity with other networking sites?

Chris DeWolfe Most sites are narrowly focused on business networking, classifieds, or dating. MySpace is a portal that uses a social networking infrastructure. MySpace includes, games, blogs, music, classifieds, forums, mail, instant messaging, and user rankings. Our model has lead to an incredibly sticky site where the average user spends over an hour per session on the site. We have also served more page views than our largest competitor in each of the last three months.

MySpace is just extending functionality around existing mass behavior. Most if not all of those other sites didn’t or don’t have that luxury — they were counting on behavior to develop around functionality. To put it another way, we’re not building it, hoping people will come. People are already on the site sharing information about bands; bands are already recruiting fans and local help; users are already clamoring to download music; they’re already ranking and rating music; they’re already showing up at our parties to hear music they learned about on MySpace. MySpace music works because two million people are already doing what we’re now making it easier for them to do.

[The G-Man] What marketing arenas are involved (or planned to be involved) with MySpace?

Chris DeWolfe Two of our bigger marketing partners are the Warped Tour and Rock The Vote. The Warped Tour, in particular, is a great fit for us. We are sponsoring the Uproar Stage and bands from MySpace will be playing at Warped Tour venues. This partnership offers great exposure for MySpace Music and participating MySpace Music bands.

Rock the Vote is also a great partner as it fits in with our mission of allowing our users to mobilize around shared interests. MySpace users can register to vote directly from our home page. We will also be participating in several of their music shows.

MySpace Phenomenon On-the-Grow:

Strategic partnerships are developing almost as fast as bands are meeting fans on the site. As of this writing, the Los Angeles Music Network (www.lamn.com) will bring its membership base and marketing strength into a partnership arrangement with MySpace.

Linking listeners, reaching behind borders, and uniting musicians with fans and industry professionals, the MySpace nation is a phenomenon. Since a passport is free, everyone in music marketing had better pay a visit. It’s at www.myspace.com. See you there.

myspace friends

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