ShopIt, a social commerce platform that enables people to set up an online store and sell goods through a variety of social networking services, has finished integrating its recently acquired Triana Global publisher network and relaunching it as ShopIt Media, another social advertising platform.
Like many others, Triana Global claims to have been one of the first ad networks that started focussing on monetizing facebook applications after the social networking service started opening up for outside developers with the launch of Facebook Platform back in May 2007. Its biggest competitors are Adknowledge (which recently picked up both Cubics and Lookery Ads), Social Media, Offerpal Media and Appssavvy. → Read More
As part of Time Warner’s $24 billion writedown of goodwill that it detailed in this morning’s fourth quarter earnings announcement, AOL accounted for $2.2 billion. That charge swung the business from a $2.0 billion operating profit last year to a $1.1 billion operating loss in the quarter.
The charge was related to reducing the “carrying value of goodwill,” which is what companies do when when an acquisition or investment is no longer worth what they paid for them. For instance, Google just wrote down $1 billion of its investment in AOL itself. But AOL can’t take a charge on a decline in its own value (at least, I don’t think it can). Its $2.2 billion charge is an acknowledgment that it overpaid for certain acquisitions or investments. But which ones?
It doesn’t say in the earnings release, but its biggest acquisition last year was the $850 million it paid for social network Bebo. It is now clear that AOL overpaid. But how much does AOL think it is worth now? 200 million? I have calls and emails into AOL, but don’t really expect them to answer that. → Read More
AOL will cut its work force by 10 percent today, laying off approximately 700 employees, as a result of the struggling economy and a decrease in advertising revenue, we’ve confirmed with the company.
AOL has 7,000 employees worldwide. The cuts have been added to our Layoff Tracker. In a company wide memo (reproduced below), AOL CEO Randy Falco said the layoffs will be rolled out over the next few quarters and U.S. workforce reductions would be completed by March. He added that the company will eliminate merit pay increases in 2009. → Read More
Year end Comscore numbers for the U.S. audience are out. The first thing we checked? How the major social networks are doing.
Facebook, which became the largest worldwide social network in mid 2008, is still playing catch up to MySpace in the U.S. They have 54.5 million monthly unique visitors, says Comscore, compared to nearly 76 million for MySpace. But Facebook’s growth rate in the U.S. averaged 3.8% per month over the last twelve months. MySpace’s U.S. growth rate is 0.8% per month. That’s nothing to be ashamed of, but unless things change a lot, Facebook will overtake MySpace to become the largest social network in the U.S. in…2010.
At current growth rates Facebook will overtake MySpace in January 2010, a year from now. That is the month Facebook will reach 86 million U.S. users, compared to MySpace’s 84 million in January. Will this prediction be correct? Probably not, but it’s the best guess given today’s data.
It may actually take longer. Facebook’s growth rate had been increasing as the year wore on but dipped in December. As they get closer to MySpace it may become ever harder to catch up. → Read More
Yet more evidence that the future of media is digital (in case there are still any doubters out there). In a report released this morning, boutique investment bank Jordan, Edmiston Group estimates that between 88 percent of the publishing and advertising industry’s revenue growth over the next few years will come from four sectors: Database & Information, B2B Online Media, Consumer Online Media, and Interactive Marketing Services. In other words, it will be coming mostly from the Web. In contrast, between 2001 and 2007, only 33 percent of industry growth came from these sectors. The other 67 percent came from traditional publishing businesses such as newspapers and magazines (formerly known as print media—the report does not cover TV, radio, or outdoor advertising).
To the extent that there will be any growth at all in the publishing industry, all you need to do is look at the multiples paid for different businesses to see where the growth is going to be. → Read More
What were the top social media sites of 2008? ComScore came out with its worldwide traffic stats for November a few days ago (so these don’t include December). They are a mix of social networks and blogging platforms. Blogger, the orange line in the chart above, still rules the roost with an estimated 222 million unique worldwide visitors in November (up 44 percent from November, 2007). Facebook, the blue line, is on pace to pass it soon with 200 million unique visitors (up 116 percent). (Note, though, that this is more than the 140 million active users Facebook itself reports—go figure). MySpace is pretty steady at 126 million uniques. Wordpress is a close fourth and gaining with 114 million (up 68 percent). And Windows Live Spaces is down 22 percent to 87 million uniques.
ComScore keeps a list of what it calls “social networking” sites, but these include blogging platforms and other social media sites as well. While the audience for blogs is still showing healthy growth overall, Facebook stands out as the social gorilla taking share from not only other social networks but blogs and other social media as well. Below are the top 20 sites on comScore’s social networking list. → Read More
Log in to the AOL-owned Bebo social network this morning and you’ll see a whole new home page. Like AOL.com, they’ve integrated direct access to AOL, Yahoo and Gmail email accounts, as well as a feed reader. They’ve also fully integrated the Social Thing activity tracker (AOL acquired Social Thing in August 2008), and are adding content that you may like based on a new content recommendation engine that the team has built from the ground up.
The Social Thing integration is an excellent way to track your friends. Unlike FriendFeed, where you track people and create a new friend list, Social Thing lets you simply enter your credentials for your favorite services (Twitter, Delicious, etc.). Social Thing then uses available APIs from those services to pull in activity from the people you already track there. It saves a step, and removes a lot of the clutter that comes with Friendfeed. → Read More
Is MySpace worth $3 billion, or $20 billion? It depends on how you value a user. It’s time to start comparing the big global social networks on something other than unique visitors and page views. I believe an effective way to value a particular user is based on the average Internet advertising spend per person in the country they live in. The higher the spend, the more value the social network can get out of the user by serving them advertising and other products. That means that, for now, users in a handful of key countries are worth far more in terms of revenue potential than those in the rest of the world. We’ve begun to build out a model that looks at social network usage by country/region and compares that to available data on total Internet advertising spend in each of those countries. The model is then able to turn an apples-to-oranges comparison into an apples-to-apples comparison. The early results are surprising. The ultimate financial value of any asset is, ultimately, what the market will pay for it. We have only a few data points to help us: Facebook, Bebo and LinkedIn are worth $15 billion, $850 million and $1 billion, respectively, based on relatively recent valuations (although only Bebo was actually sold completely; Facebook and LinkedIn raised investments at those valuations). The last valuation of MySpace was just $580 million, back in 2005 when it was acquired by News Corp. Which valuation is most “correct?” It’s hard to say based on the data that’s been available to date, which is mostly just aggregate page view and unique visitor numbers from Comscore and other services. Based on worldwide unique visitors, for example, Facebook recently overtook MySpace to become the “largest” social network. According to raw worldwide user number, the biggest social networks are Facebook, Myspace, Hi5, Friendster, Orkut and Bebo, in that order. But when you apply the model that we’ve created below, which takes into account where users live, the rankings change substantially. MySpace is by far the most valuable social network based on available data. A competitor like Orkut is worth only 1/20th of MySpace, even though it has nearly 1/4 the number of users. Properly Ranking Social Networks Our model takes Comscore data for available countries and regions. We’ve graphed each of 26 well known social networks with the data we have been able to collect. → Read More
In April, Facebook caught up to MySpace in worldwide unique visitors (actually nudging past it with 116.4 million unique visitors versus 115.7 million for MySpace). Now the worldwide comScore numbers are out for May and Facebook continues to blow past MySpace with 123.9 million uniques (up 6 percent), versus 114.6 million for MySpace (down 1 percent). Facebook also boasted more pageviews worldwide (50.7 billion versus 45.4 billion). Maybe MySpace’s redesign which just went live this week will pick things up for them again. In the U.S., though, which is the biggest advertising market, MySpace is still well ahead of Facebook, with 73.7 million unique visitors in May compared to 35.6 million for Facebook. And that number for MySpace is up 2 percent from April, whereas Facebook’s had 0 percent growth. So it remains to be seen if and how fast Facebook can catch up in the U.S. As for the second-tier social networks, they have fewer than half as many visitors. Here is the breakdown for May: Worldwide Unique Visitors To the Top Social Networks Facebook—123.9 million MySpace—114.6 million Hi5—49.6 million Friendster—38.1 million Orkut—32.2 million Bebo—25.1 million → Read More
I had a chance to speak with Bebo co-founder Michael Birch last weekend at the Founders Brunch event at Loic Le Meur’s house in San Francisco. It was the first chance I’ve had to congratulate him in person for the $850 million sale of Bebo to AOL earlier this year. Most of our conversation was around the future, and what the Bebo founders will do next. Birch was recently interviewed by the Telegraph and spoke about the history of Bebo. He was vague on his plans for the future, though, saying “I have thought about what I will do and the conclusion I have come to is that I will get bored quite quickly with day time television. I need to do something that continues to be challenging and interesting. I don’t have any great ambition to go out and make money. But I am still fascinated in starting up businesses and starting it in a way and running in a way that I want to do it.” But Birch was more specific when we spoke, saying he’s planning on spending time growing Birthday Alarm, a site he founded with his wife Xochi Birch and brother Paul Birch in 2001. Birthday Alarm is a relatively simply service – users create an account and are then prompted to send an email to all their friends asking them to simply tell the service their birthday. Birthday Alarm then notifies users by email or SMS when a friend’s birthday is coming up. Lots of people who get those emails end up signing up for the service, too, which has allowed it to spread so virally (Birch says the service had 100 million users at one point). And the business model is pretty straightforward – offer users the ability to send birthday ecards for $14/year. When the Birch’s started focusing on Bebo, attention to Birthday Alarm naturally waned. The service has since dropped to 50 million active users. But the number of paying users, around 300,000, has remained flat over the years. Those users bring in around $4 million/year in fees, plus additional revenue for advertising. Birch thinks they can regrow the already profitable service by refining the product and focusing on marketing. This, at least, will keep them busy during the non-compete period they agreed to in the Bebo sale. During that time, he can’t set up any new social media-related business. CrunchBase → Read More
If you try to buy an ad on Facebook, there are certain words that are taboo. Any ads that contain four-letter words are automatically blocked. So too are ads with the names of competing social networks “MySpace,” “Friendster,” “Hi5,” , or “Orkut.” (Curiously, “Bebo” and “OpenSocial” go through just fine, as does “Microsoft,” “Yahoo,” “Google,” and “AOL”). Okay, so Facebook doesn’t want to run ads for some of its competitors. But why is 3Jam blocked? The startup offers an SMS service that lets people send multiple text messages at once, and it even has a Facebook app that does the same thing. CEO Andy Jagoe was befuddled when he tried to create a Facebook ad to test a new product, only to find out that the term “3Jam” was also blocked. (The product actually sounds pretty cool: it will be a way to send and receive text messages for free while you are online, and then route them to your phone when you are offline). Says Jagoe: It seems crazy to think that they consider us competitive. This is kind of weird. It is like censorship. It does seem weird. What other startup names or products are blocked by Facebook? CrunchBase Information 3Jam Facebook Information provided by CrunchBase → Read More
Bowing to the inevitable, Microsoft took a big step today towards data portability by announcing that Windows Live contacts can now be exported to social networks and other Websites. Its Windows Live Contacts API will work with Facebook, Bebo, Hi5, Taged, and LinkedIn to start. Members of those social networks will be able to import their Windows Live contacts (i.e., their Hotmail address book) so that they can more easily find or invite those people into their social networks. Microsoft is also launching a site, Invite2Messenger, for importing social networking contacts into Windows Live. Right now that only works with Facebook. Although Microsoft is part of the Data Portability Workgroup, this is a separate effort, confirms a spokesperson. So much for industry standards. But this is an important step in allowing people to take their contacts with them no matter where they reside, whether in their email or social networks. Instead of startups scraping Hotmail to ingest contacts, now they have a legitimate way of doing so. In a way, this is a bit of a catch-up move. You can already import contacts easily from Gmail into services such as Facebook, Friendfeed and others. Maybe Microsoft had a touch of Gmail envy or were concerned about being left behind. At a certain point, an email service that doesn’t let you export your contacts could really be a damper on your social life elsewhere on the Web. → Read More
Why is it the Brits have all the crazy-stupid ideas about how to screw up the music industry even more than it is already? British musician Billy Bragg argues in the New York Times today that some portion of Bebo’s $850 million sale price should go to the musicians who uploaded their music to the site. Note that Bragg neatly sidesteps the fact that music was uploaded to the site by artists (or their labels) themselves, with full knowledge that they would not receive payments of any kind (except free marketing, of course, and access to Bebo’s tens of millions of music loving users). His argument is based on the notion that Bebo’s success was based on the availability of streaming music on the site: “The musicians who posted their work on Bebo.com are no different from investors in a start-up enterprise…Now that the business has reaped huge benefits, surely they deserve a dividend.” Bragg also tries to take direct credit for Bebo’s success: Mr. Birch has cited me as an influence in Bebo’s attitude toward artists. He got in touch two years ago after I took MySpace to task over its proprietary rights clause. I was concerned that the site was harvesting residual rights from original songs posted there by unsigned musicians. As a result of my complaints, MySpace changed its terms and conditions to state clearly that all rights to material appearing on the site remain with the originator. A few weeks later, Mr. Birch came to see me at my home. He was hoping to expand his business by hosting music and wanted my advice on how to construct an artist-centered environment where musicians could post original songs without fear of losing control over their work. Following our talks, Mr. Birch told the press that he wanted Bebo to be a site that worked for artists and held their interests first and foremost. Bragg does attempt to argue his case, primarily by (1) saying that social networks are as much to blame for declining music sales as the people who are downloading songs in violation of copyrights, and (2) saying that arguments that social networks are doing musicians a favor by marketing their music are “disingenuous.” Both arguments have holes in them so large you could drive a BitTorrent stream through them. Social networks have absolutely nothing to do with the decline in music sales. The fact → Read More
When AOL bought Bebo for $850 million last week, CEO Randy Falco and COO Ron Grant believed the social network would help save AOL from its downward spiral. Social networks are where pageviews are generated these days, and AOL’s own attempt to turn AOL Instant Messenger into one (via Aim Pages) was a dud on arrival. Bebo, with 22.9 million unique visitors in February and 10.3 billion pageviews (per comScore), was growing and it was for sale. Even though AOL is trying to transform itself into an advertising network, it makes much higher margins on the ads it places on its own pages. The formula for its business is pretty simple: Unique visitors X page views = advertising inventory. If social networks are the future of the Web, AOL needed to own one. But was Bebo the right one, and did AOL pay too much for it? Those are questions that other AOL executives below Falco and Grant are asking themselves, reports Silicon Alley Insider. The concerns of the senior executives who actually run AOL (and reportedly were not consulted on the top-secret acquisition) include: the general difficulty of making money placing ads on social networks (see Google’s missed quarter), “flattening traffic growth at Bebo” (see chart below), overly-rosy revenue projections for Bebo that might have been three times too high, and the likelihood of losing Bebo’s most talented employees (the founders are already out of there). From my own sanity-checks with sources, there is definitely the sense that AOL was not Bebo’s first choice. Initially, it was aiming for a valuation above $1 billion. But then the ground started falling out beneath it, and AOL’s $850 million offer started to look real good. AOL was a desperate buyer. Even if it bargained Bebo down on price, it may still have paid too much. Bebo’s growth is indeed flattening relative to other global social networks like Hi5 or Friendster. And while social networks generate a lot of pages, they are not yet particularly valuable pages. There is a silver lining here, though. If AOL can use its targeted advertising assets (Advertising.com, Quigo, Platform A) to make that Bebo inventory pay out, it will surprise everybody. And that will be good for Platform A because it then will be able to grab more advertising business from other social networks. (That is, if New York State does not outlaw targeted advertising before → Read More
I’m not going to say that we told you so, but we told you so. AOL has acquired social networking site Bebo for $850 million in cash. AOL CEO Randy Falco (left in picture) sent an email to all AOL employees this morning. Allen Stern’s press call notes are here. This is an acquisition we called last month (when I’m told they first signed a term sheet), although frankly the leads dried up on who was acquiring them in the last couple of weeks (it turns out the two companies were furiously negotiating, even until this morning). AOL and Bebo have been in talks since September 2007. Investment bank Allen & Co. has been shopping Bebo for some time. A number of potential buyers passed on the company, including News Corp., Microsoft and Google, our sources say. Yahoo may have also taken a long look, but recent woes probably prohibit it from doing any large transactions. AOL’s intention, they told press in a briefing call this morning, is to marry AIM and ICQ with a proper social network. At a high level, AOL is saying they are basing much of their go forward social networking strategy around AIM. Layering in Bebo, they say, lets people communicate both synchronously and asynchronously. The goal is to allow people to both express themselves and extend existing relationships. AIM users have 100 buddies on average. Bebo’s platform allows those users to share and distribute media as well. AOL’s also talking about their Platform A advertising platform which can blend big brand advertising along with performance. Bebo’s page views will be enticing to those brands to the extent they can track how those ads do. Current President Joanna Shields (middle in picture) will continue to run Bebo and will report to AOL President Ron Grant (right in picture). Founders Michael Birch and Xochi Birch will shortly be leaving the startup, apparently. Rumor has it, though, that Shields has effectively run the company for some time. Bebo was originally launched in 2005. Bebo is the second largest social network in the U.K. (its largest market) after Facebook. Recent Comscore data says Bebo has 22 million unique visitors and 11 billion page views; AOL said Bebo users spend an average of 40 minutes a day on the site in a press briefing. The company claims 40 million users. The deal must clear U.S. and EU antitrust hurdles → Read More
In the global race to be the top social network, MySpace and Facebook are neck and neck. In January, 2008, MySpace was still the biggest social network worldwide with 109 million unique visitors, according to comScore. But Facebook was close on its heels with 101 million. (Meanwhile, the data in the U.S. for Facebook at least shows a possible slowdown in growth). While MySpace and Facebook are fighting it out for the top spot, back in the second pack some interesting sprints and scuffles are going on that are worth keeping an eye on. Everyone in that second pack (Hi5, Freindster, Orkut, Bebo, Imeem) are about a third to a quarter the size of the leaders in terms of worldwide unique visitors, so I’ve isolated their performance in the chart above (it is harder to see if you include Nos. 1 and 2, MySpace and Facebook). In January, both Hi5 (No. 3, in red) and Friendster (No. 4, in blue), made moves to pull away from Google’s Orkut (No. 5, in green) and Bebo (No. 6, in yellow). The latter two maintained a more steady pace. Coming on strong from behind is Imeem (No. 7, in purple), which surpassed Multiply (No. 8, not shown). The chart below has most of the stats, except for the last two—Imeem had 17.8 million global visitors in January, 2008, a 477 percent annual growth rate (Multiply had 17.6 million, a healthy 203 percent rise from the year before). For Hi5 and Friendster, global growth is a major part of their game plan. Friendster, for instance, which dropped off the radar for most of us in the U.S., is now the single largest social network in Asia. It’s top five countries are the Philippines, Indonesia, Malaysia, the United States (legacy members who never left, plus new growth among Asians here), and Singapore. Friendster has kept its growth going by launching fan profile pages for Asian pop singers, launching four new languages since September (Chinese, Japanese, Korean, and Spanish), and letting developers create apps for its site. So does that mean that Friendster and Hi5 are worth more than the $1 billion Bebo is rumored to have sold itself for? Not necessarily. It depends on the actual composition of their members, click-through rates, and other financial factors. Generally speaking, advertisers like to target their campaigns by geography, and pay less for ads that target populations with → Read More
Spanish language social networking site Sonico is the biggest social networking site you’ve probably never heard of before today. If you haven’t you wouldn’t be alone, it has zero hits in Google News as I write this post. Buenos Aires based Sonico from FNBox launched in August 2007 with the usual social networking mix of message boards, profiles and networks based on school or workplace. Nothing remarkable, until you look at the numbers. Sonico now has over 8 million registered users, and has recently launched a Portuguese version as well (so as to cover the rest of South America). According to Alexa the site now ranks at 167, and is in the top 50 sites in Colombia, El Salvador, Bolivia, Ecuador, Paraguay, Guatemala, Nicaragua, Peru, Honduras, Panama, Chile, Venezuela, Dominican Republic, Argentina, Cuba and Mexico. We can only get the worldwide figures from comScore and although it’s still below the leading second tier social networking sites, it’s still placed extremely well for a site that is just 6 months old. Targeting the South American market is in vogue at the moment with players such as MySpace and Facebook now offering Spanish language versions, and smaller players such as Wamba trying to get a foot hold in a continent that has a growing online user base. Google’s Orkut is already big in Brazil and Hi5 is also popular locally. If their current growth continues Sonico will be a site to watch. → Read More
