Product Development and Internet Marketing

2007 was the first year I tried my hand at industry punditry, and results were... mixed. This year, I'm writing on a keyboard that my 21-month-old decided didn't really need 'shift' or 'enter' keys, so please forgive me some erroneous lowercase words or run-on sentences.

Instead of broad trend predictions, I'm going to be specific about specific companies. I have no inside knowledge of any of this, pure speculation.

1. Overpriced widget acquisition

2008 might be jumping the gun on this one, but I'd say either Slide or RockYou gets bought by a big media company for an eye-popping valuation. Potential buyers: Viacom, Yahoo. Potential price: $100. These companies have some value in terms of pure media sales, but also they have the consumer mojo to continue extending their reach with new products, new distribution tactics, etc. Heck, the price might be $200.

2. HD Video Comes to YouTube and Other Video Sites

Whether this comes true or not is hard to judge since there's no common definition of "HD". Suffice it to say that Adobe's adoption of H.264 video in the MovieStar Flash release along with continued declines in CDN pricing will push the quality way, way up on video sites. I'd expect YouTube to start with special sponsored areas with HD content, followed by general availability for the cat-falling-off-the-cliff genre.

3. Apple TV Reinvention

Given the upcoming MacWorld in January this is really a short-term prediction. TV is too big of an opportunity to lose hold of. The recent rumors of a movie rental service through iTunes fits right in with a new AppleTV product with either a built-in tuner, cable card, DVR, or something to break through the set-top box morass.

4. Twitter and the Phone Company

This is a little out of left field, but I expect Twitter to make a major deal with one of the major mobile carriers worldwide to integrate into the phone address book and interface. Think "VTwitter with Unlimited Text, a great way to keep in touch with your friends and family" for just $9.95 per month. Alternatively, AT&T buys them flat out.

5. Google Gets to 75% Search Share, Ask Gets to 5%

Google is close to 70% but there's really no one in their way. Yahoo and MSN/Microsoft/Live (whatever the f-- they call it) are beyond lame. The death spiral of diminished share=diminished revenue=diminished resources has begun. Microsoft can keep chugging without returns but their inability to create consumer products (other than XBox, which was created essentially outside of MS) means money will be going down a rat-hole. Meanwhile, I have a hunch that Ask.com is getting a little momentum and sharpening its differentiation. Just a hunch.

6. Internet Advertising Continues Crazy Growth

I can't find precise numbers on the consensus for 2008 Internet advertising revenue, but it's going to be gangbusters. Newspapers are still getting far too large a share of the pie for their old crusty readership, and the writer's strike isn't exactly going to help TV hold onto it's premium rates. Even a recession is likely to help Internet advertising vis-a-vie other media given ROI impact even if the overall impact is slower growth. If there's no recession I'll put US growth over 30%. If there is a recession, make it 10%.

7. Yahoo Stock is up 20% by End of Year

Not sure what's going to happen to this lumbering giant, but I'm pretty sure something is. The fundamentals are just too good and the people are too smart to let it all slip away. I'd expect new management, a tie-up with eBay, Microsoft, AOL, or someone (anyone) to juice up the stock price.

8. Shake Out in the Online Music Businesses

There are too many companies that aren't Apple competing for consumer attention, and consumers generally don't care about any of them. Between Pandora and iMeem in the free-streaming-music-but-don't-call-it-radio market, and Napster vs Rhapsody in the jukebox-in-the-sky market, something is going to give. The question is whether anyone will notice.

9. Facebook Advertising is a Loser on Site...

I guess the revolution will have to wait. Facebook's deal with Microsoft is for the crappiest, remnant, below-the-fold, left-side of the page, crap inventory you could never pawn off on the dumbest media planner in the world, even after plying her with $15 apple martinis. Beacon is a cute idea, poorly executed. Net-net, there's no revenue to be had on Facebook at this time, other than by Scrabulous and other widget providers. Expect either a) some page redesigns to show more ads; or b) a resistance to such ads resulting in lots of "How will Facebook ever make money" articles.

10 ...and a Controversy Off Site

Given it's lack of advertising revenues and it's huge database of consumer information, some bright 21-year-old bulb will go off and they'll decide to start selling this data (in a privacy-protected way, of course) to those who actually have valuable advertising inventory. How much more could you sell your crappy ad network's banners for if you could find out the interests of the user? This will, of course, set of a massive shit-storm, congressional hearings, etc. With any other company (MS, Google, Yahoo), I'd assume the company was smart enough to understand the implications and move with caution. But with Facebook I'd expect nothing of the sort.

December 30, 2007 7:07 PM