USA Today joins the latest to drink the widget koolaid:
Max Levchin, CEO of Slide, the largest widget maker, with 134 million monthly viewers across the major social networks, likens the entrepreneurial climate among widget makers to the early 1980s, when software companies such as Adobe Systems developed applications for PCs. “It’s a really exciting time for software development,” says Levchin, who also co-founded online-payment processor PayPal.
There is a lot of value in creating products or services that resonate on social networks, that’s for sure. But, let’s be somewhat candid here, we’ve basically diluted the definition of a web application to include anything and everything to get investors excited.
Levchin, for example, is a brilliant bloke, but comparing Slide to Adobe is pushing it, to put it mildly.
I think the greater issue is “you better have a strategy in place for social networks, because clearly that’s where audiences are going.” Whether or not widgets remain the holy grail is another question.
The Web has definitely been turned inside out, look at AOL.com, who last year was discontent to be a walled garden, opting for a free portal, then one short year later imploded the portal strategy to become a network, too.
We ourselves at WatchMojo.com are no different: we continue to develop our property as a storefront but the lion’s share of our growth comes from our network, too. Just this week, I explained how we were building the most valuable apps on the most valuable social networks.
That’s some heady growth, we’d never be able to match the size and reach of our network on our property… but giving up the property altogether makes it hard to really showcase your value, since a property is a storefront required to sell your wares, no?
Either way, the notion that widget makers are the next hot IPO is sheer folly:
“The possibility of going public has never been better for us,” says Jia Shen, chief technology officer and co-founder of RockYou, makers of a widget that turns anyone’s photos into slide shows. The 2-year-old company boasts 40 million monthly viewers across the major social networks.
Sure, while you’re at it, let me show you a bridge, too. This does not mean that they’re not valuable, but caution is required when evaluating the value thereof. Just this week, a popular, money generating app was sold for $21,500… not exactly IPO pricing.
Although Facebook members generally eschew banner ads, they are more receptive to widget ads, according to a study in July by market researcher Grunwald Associates.
“If 2007 was the year for widgets, then 2008 will be the year advertisers reallocate their budgets to take advantage,” says Martin Green, vice president of business for Meebo, an instantmessaging company that creates widgets.
I don’t doubt Green would say that, he’s biased. It’s like me saying video will take over the Web, then the world. Of course, are people biased because of the business they’re in, or are they believers in a business and then enter a business, displaying a bias afterwards. I don’t doubt widgets will be relevant in the social networking landscape, but only because social networks themselves are hard to monetize. But, even then, let’s face it: social networking ads will remain paltry next to total online ads, which will be a $30B+ market by 2008:
Ads on social networks are expected to haul in $1.2 billion worldwide this year and $1.9 billion in 2008, says researcher eMarketer.
I don’t know. I personally see the need to have a network as a very important facet of a company’s growth plan, but to get all jazzed up around widgets seems rather faddish.
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WatchMojo NewsletterI won’t make any friends in high places… but I probably won’t lose many either… so here goes:
Brightcove made more and more promises to investors to raise more money (we’re a CMS platform, a YouTube like destination and an ad network), then it scaled back its consumer destination strategy (wisely) and gave up its dream to be an ad network (wisely). So now it’s a video serving platform, only. It’s good to focus, but it sure will be hard to make that $80M in funding generate a positive IRR… but who’s keeping track of that when it’s other people’s money, right?
Now, they’re seemingly giving up the low-end, long-tail market and going for high-end publishers only (I think).
Latest strategy shift from the folks over at Brightcove:
Dear Brightcove.TV member,
Beginning December 18, 2007, we plan to end support of direct consumer uploads to Brightcove.TV. As a result, you will not be able to upload new videos to Brightcove.TV after December 17, 2007. But videos you have already uploaded to Brightcove.TV will remain available on the site and through your Brightcove.TV channel. Videos you have embedded in other sites and blogs will also continue to play.
If you have a Brightcove Platform or Network account, which means you use the Brightcove Console, then you will still have the option to promote videos on Brightcove.TV.
Brightcove.TV will continue to be a guide to great video from Brightcove media and business partners. The site will have new videos added to it daily from these partners and these videos can be saved as favorite videos in your channel.
If you work for a media company, marketer, non-profit, or business and are looking to purchase the Brightcove platform to publish and distribute video on your own site, please visit the Brightcove Products Overview section of our website.
We appreciate your interest in Brightcove and apologize for any disruption this change may cause you.
Sincerely,
The Brightcove Team
I don’t even know what this means anymore. The company’s raised $80M in VC money and from media companies. Nice!
Related:
- Media companies investments in Video
- Brightcove’s Strategy du Jour
- Brightcove: Keep is simple stupid
