January 09, 2007
Making money by doing (almost) nothing
Douglas Galbi’s blog is a fount of interesting statistics and insights. The current post says that bloggers don’t really hyperlink much, if at all. That probably because blogs like this, whose aim is to garner attention of hordes of admiring (and occasionally paying) readers aren’t the norm. Most people are writing for a few friends, family or associates (or even purely for the expressive joy of it).
Google made its fortune by extracting the value of intentional “digital social gestures” by understanding that hyperlinks are generally endorsements of authority. Hyperlinks are embedded by the writer of the page, and are always intentional. Douglas’s numbers suggest Google will struggle to grow and dominate in the world of social media.
(For those of a mathematical outlook, it turns out that Google PageRank is done this way: each hyperlink adds to the cross-weighting in a vast sparse matrix of all web pages. The absolute rank of each page is then derived from the eigenvalues of the matrix. The same method is used in decison science tools.)
The next trend I believe will be doing the same for the “read” side of the media and communications business as hyperlinks do for the “write” side. That means extracting all the latent value of activities in web browsers, RSS readers, IPTV program guides, e-book readers, and so on. For example, every visitor to this site leaves a “referrer” line in their web request, so I know where they come from. There’s a business to be made in collecting these and optimising the “transfer traffic” from those sources (for a fee).
This is another example of “edge competence”, where you recover and magnify the value of activities and creativity of users at the “edge” of the network. The challenge is managing the privacy issues, and the “what’s in it for me?” question. Would you accept a free satnav with your hire car… if Avis could use the data on where you’d been? There’s probably a tricky balance of policy, brand and technology required.
If you haven’t read it yet, you should check out Umair Haque’s seminal article and powerpoint on the matter. Probably more important than whatever else you were about to do.
PS - I’m sat on a GNER train from Edinburh to London enjoying their onboard wifi service, blowing what’s left of my brains out to some groovy tunes. £9.95 (c. US$19) for the duration. (If I was returning tomorrow morning, it’d cover that too.) It’s not fast, but it’s “always on”. Apparently uses a mix of 3G and satellite. If you’re used to tabbed browsing, opening new pages in the background, and general multi-tasking, you’ll be fine. Electrical power to every seat. Very impressed. 3G alone would be a terrible experience of constant drop-outs, and the PC plus smartphone-as-modem combo just isn’t made to cope well with that. The line skirts the top of the cliffs here in Northumbria, and sometimes when you look out of the window opposite you see nothing but sea!
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