Microsoft Re-MIX07 Silicon Valley – Friday June 22, 2007

>>Register here (it’s free)

We've seen a lot of changes on the Internet recently – Web 2.0, Enterprise 2.0, Office 2.0 (all one and the same?), the rise of Internet advertising, social networking sites and more. So it's interesting to see Microsoft, known for its traditional desktop apps and servers, make such a big foray into the world of Web design technologies.   First it was their Expression Studio (for designing standards-based Web sites, creating rich user experiences on the desktop, or managing digital assets and content), and now at MIX07 it was Silverlight – a new cross-browser plug-in (runs on Internet Explorer, Firefox and Safari browsers on Windows and Macs) for delivering media experiences and so-called Rich Interactive Applications (RIAs) for the Web.

 What is Microsoft doing with all this new technology? Or, rather, what is it enabling designers and developers to do and why does it matter to you? On June 22, Scott Guthrie is going to reprise his role from the opening keynote at MIX07 to answer these questions. You may not have heard much about Scott, but, as John Osborn writes on his O'Reilly Windows blog, Scott is known to Microsoft fans as General Manager of the group responsible for ASP.NET 2.0, ASP.NET AJAX, and now Silverlight, and also one of the most accessible of Microsoft's bloggers. Scott got a standing ovation from 4000 people at MIX – for his open communications and for the steady stream of new UI frameworks and tools that the team he leads has released to the Microsoft developer community as the web has evolved. We think it will be a fascinating conversation.

In a nutshell: The ad market isn’t caving anytime soon

Last night we pulled together a full crowd and ruminated about eyeballs and the people who love them. Ask 10 start-ups where the money will come from, and 9 out of 10 will say, “advertising.” Ad dollars are moving off TV and out of magazines, but are there really enough advertisers out there to make everyones’ businesses profitable (and sustainable) over the long run?

Panelists included Vineet Buch of BlueRun Ventures; Joe Hurd of VideoEgg; Ted Rheingold of Dogster; Lance Tokuda, CEO, RockYou; and Mark Albert of Perkins Coie. Besides the speakers, the room was full of other industry folk with lots of questions and comments about the topic. Some of the take-aways…

- What matters to advertisers? Users. It’s not really eyeballs but mouseclicks and brain activity — a.k.a. engagement. To engage potential buyers is no simple feat. Broadband has vastly improved possibilities as users can now play around with video or games provided by brands.

- As suspected, Dogster knows a lot about its users and can command better CPMs, but it’s a lot of work to keep a smaller number of buyers happy. Reach trumps focus. Ad networks make a lot of sense for focused players with decent but not massive user bases.

- Is revenue-stream diversification important? Yes – every single company said they were exploring ways to lock in recurring revenues for when the ad market isn’t so hot. RockYou has an interesting approach: offer a paid feature for a while and then make it free. Kill off the paid feature after the free registrations explode. Teenagers who don’t have a lot of access to cash are a lot more willing to put up with ads.

- Widgets are changing the rules of engagement – from increasing the number of revenue-share partners: widget owner, content producer, and site hoster – to forcing new ways of measuring views.

- How long will the ad-market be hot? All agreed that we have at least another few years.

-Alison Murdock, President of Dealmaker Media

http://www.doppelganger.com
http://www.themusiclounge.com

Every so often I get the strange feeling that I might be getting old  (ok, I’m almost 19). More often than not, that feeling comes when I take a look at the heap of 3D communities vying for my patronage. So far, I've not been able to understand the appeal of the virtual worlds. But I know when cool is cool.

Doppelganger builds 3D avatar based communities for entertainment and media companies. Their own property is The Lounge, an online nightclub for teens, which features enough events and parties to put real world venues to shame. Just this month there's a CD premier at the Sky Bar, a Black and White Dance Party at the Disco Rooftop and an underground dance music mix session at the Tea House.

With everything going on in The Lounge, it's no surprise that advertisers and hipsters flock to the site. Everyone from Roca-Wear to DJ AM has a presence in their virtual world, making The Lounge the place to be.

Stay tuned for tomorrow’s post featuring an interview with Doppelganger CEO/President Tim Stevens. We’ll discuss why The Lounge is cool, why virtual worlds are such a popular media destination and why I'm officially old.

http://www.adap.tv

User generated content is obviously the moving force of the new web. Rather than just a select few ‘experts' generating content, more and more sites provide the rest of us with the publishing tools to spread our ideas. The problem for the content creators, as we are finding out, is finding ways to monetize our output. Video advertising platform Adap.tv seeks to provide the answer to the monetization question.

Adap.tv allows content generators and advertisers the opportunity to pair up relevant advertising with content. Although this sounds quite similar to other video advertising platforms, Adap.tv's founders have taken a bit of a different direction in the manner in which they deliver the ads. The site's service places in-stream ads at the bottom of the clip, as opposed to placing pre-roll or post-roll ads at the beginning or end of clips, so as not to detract from viewing. Adap.tv hopes this, combined with the highly relevant nature of their advertisements will lead to a greater click through rate for consumers. We sat down with Adap.tv CEO Amir Ashkenazi to discuss his company's business strategy: 

1. What is Adap.tv about? What’s your business model?

Adap.tv provides a unique online video advertising platform that allows publishers and advertisers to match relevant advertising with online video content. The company uses advanced technology to analyze the video, audio and metadata to serve contextually relevant ads in a viewer-friendly manner. Adap.tv continues to monitor viewers’ interaction with the ads and adapts in real time to their interests and behavior. Our core value proposition is to deliver the right ad at the right time.

For publishers, we provide a new, substantial revenue line through in-stream advertising. Through this viewer-friendly, in-stream advertising, we provide advertising opportunities beyond the pre and post-roll world.
For advertisers, we offer a low cost, effective way to reach online video viewers.

The business model is based on a revenue share for publishers via CPC, CPM and CPA advertising. In sum, we collect a fee from advertisers and share the majority of that revenue with publishers.

2. Why did you start this company?

We saw an enormous opportunity to deliver effective, viewer-friendly advertising in a new market. With dynamic changes in video content distribution and viewing, the need for relevant and contextual ad placement in video — placing the right ad with the right video –- is tremendous.

There's little doubt that advertising is going to be one of the key ways in which money is made from media in the not too distant future. But pre-roll and post-roll ads are not consumer friendly in the least. I believe that the debate about the length of the pre-roll is the wrong debate. Adap's technology enables in-stream ads to run during the clip – often at the bottom of the screen – rather than delaying the viewing or interrupting it.
 
3. What’s your team’s background?

We are very proud of our team. Here is some information about our management team:
•    Amir Ashkenazi, CEO and Co-Founder
Amir drives the overall strategy and manages operations for Adap.tv. Most recently, Amir was Founder and Chief Technology Officer of Shopping.com (formerly DealTime.com), a leading online shopping service that helps consumers make informed purchasing decisions by comparing products, prices, and stores Web-wide. Amir launched and successfully led Shopping.com’s technology and research efforts. Shopping.com completed an initial public offering in October 2004; the company was later acquired by eBay (NASDAQ: EBAY) in August 2005.

•    Teg Grenager,   CTO and Co-Founder
Teg manages all technology and operations for Adap.tv. Teg is a Ph.D. candidate in the Computer Science Department at Stanford University with a research focus on statistical natural language processing. He has provided strategic consulting services to many Fortune 100 companies with global management consulting firm, Arthur D. Little.

•    Dan Klein, Chief Scientist and Co-Founder
Dan is responsible for technology and product research for Adap.tv. An assistant professor at the University of California at Berkeley, Dan is a leading researcher in statistical natural language processing. He received his Ph.D. in Computer Science from Stanford University.

•    Sean Behr,  Vice President, Product Management
Sean leads Adap.tv’s product design, development, and customer experience. Sean has held various management roles at Shopping.com, a leading online comparison shopping service, including roles in human resources, sales, product management, and strategy development.

4. How is Adap.tv different from other video advertisers?

This is a difficult question given how early we are in the online video advertising market. That being said, I think Adap.tv is more focused on delivering the right ad at the right time than other companies who apparently are focused on the “delivery” of ads. It's very easy to “deliver” an ad over video. It’s hard to deliver the right ad at the right time in a viewer-friendly way, which is what Adap.tv does.
 
5. Have you entered into any partnerships with other companies? How did you go about finding opportunities and negotiating deals?

We have signed several important partnerships:
•    Metacafe.com, one of the largest video web sites
•    thePlatform, a Comcast company
•    Shopping.com
•    Amazon.com

6. What was the process for you to raise capital? How did you decide what investors to work with?

From the beginning, we focused on a few select investors whom we were eager to work with. We also stayed focused on our core value proposition and the market solution we bring to the table. This strategy has served us well.

7. What are you bringing to the market that’s innovative and groundbreaking?

We think our ability to analyze video and deliver highly relevant advertising opens amazing opportunities for publishers and advertisers. Through sophisticated technology, Adap.tv can deliver the right ad at the right time for any video including both user-generated and professional content.

To date, online video advertising has simply copied the techniques that worked best in the offline world. At Adap.tv, we are using the power of contextual advertising to deliver the next generation of online video advertising.

http://www.kaneva.com

I must admit I can't quite figure out exactly what it is that Kaneva is. Half social networking site, half virtual world, the site is a mash-up of Youtube, Myspace and Second Life. Either way Kaneva is more than cool. The social networking and media sharing features are well refined and include everything you'd expect from such a site. But, it's the interchange between the 2D world and 3D world that is most extraordinary.

Kaneva allows users to share information between their profiles seamlessly. Users can, among other things: use their photos as wall adornments in their virtual apartments, and stream video clips from their profiles to their television screens in the virtual world. The possibilities are endless. Artists and musicians can post their work to the site then host parties with guests from around the world. That aside, it’s easy to see Kaneva achieving the immediate mainstream proliferation they seek; the site should be a hit with the ‘geek chic' crowd that will soon tire of Second Life. And, with the team working to develop games, Kaneva is primed to give the net something to talk about.

Which Comes First – Eyeballs or Revenues?
June 6, 2007 | 6:30am – 8:30pm | Perkins Coie | Menlo Park, CA

Ask 10 startups where the money will come from, and 9 out of 10 will say, “advertising.” Despite the fact that ad dollars are moving off TV and out of magazines, are there really enough advertisers out there to make everyone’s business profitable (or even sustainable)? Didn’t we learn anything from the last millennium?

Most consumer-facing startups fight an uphill battle to gain massive user adoption, or dare we say, eyeballs. Ask 10 startups where the money will come from, and 9 out of 10 will say, “advertising.” Despite the fact that ad dollars are moving off TV and out of magazines, are there really enough advertisers out there make everyone’s business profitable (or even sustainable)? Seasoned executives will share their views on the topics that matter most for strategic planning:

• Turning consumer-facing company into a breakout play sustainable by advertising dollars
• Building your business to withstand fluctuations in the advertising market
• Alternative growth and exit strategies while ramping up your user base

Moderator:
Mark Albert, Partner, Perkins Coie

Speakers:
Vineet Buch, Principal, BlueRun Ventures
Ted Rheingold, CEO, Dogster
Matt Sanchez, President and CEO, VideoEgg
Lance Tokuda, CEO, RockYou

The San Francisco Producers Guild of America, in conjunction with BAYCAT, is proud to present a night of social networking, educational entertainment and audience participation. June 5th, BAYCAT*

“WHERE DO PODCASTING & HOLLYWOOD CONVERGE?”

Join us for a lively and informative panel discussion and explore the exciting and largely uncharted world of Podcasting.

“How does this compare to any other social networking experience out there? How does this stack up against any other New Media, traditional entertainment and information experiences for participants and creators? Where is it going? Can you really make money doing this, and if so, how?” These are just some of the questions we’ll be covering.

BAYCAT is a non-profit community media producer that educates, empowers and employs underserved youth and adults in the digital media arts. By bridging the digital divide, BAYCAT inspires students to stay in school and become lifelong learners, and to use the power of digital media and design to shape their communities and tell their unique stories.

Some BAYCAT students may also be shooting the event, so please don’t be surprised, if they come around and ask you a question :=)

The event is free, but an RSVP is required no later than June 4th.  If you plan on attending, please e-mail sfpgamixer at yahoo dot com and write your name in the subject line.

*BAYCAT
Bayview Hunters Point Center for Arts & Technology
2415 Third Street, Suite 230
San Francisco (near Mission Bay), CA 94107

For more information about the Producers Guild of America, please visit http://www.producersguild.org

For more information about BAYCAT, please visit http://www.baycat.org

http://www.thisnext.com

As advertisers are increasingly finding out, word of mouth recommendations just might be more effective than their multi-million dollar campaigns. While marketing firms like Saatchi and Saatchi spend millions attempting to sell us everything from Coca-Cola to Dr. Martens footwear (because apparently, they'll last well into the afterlife), consumer product review site ThisNext allows buyers to share their honest opinions on those same products.

ThisNext works on the power of personal consumer to consumer recommendations, as opposed to the aggregate consumer recommendation system of sites like Amazon, and Aggregate Knowledge. Lots of product images make the recommendations attractive and compelling. Focusing on delivering relevant suggestions that resonate with real people, ThisNext is divided into three sections for ease of use. Most notable of which is Shopcast, a feature that allows bloggers to place a stream of reviewed products on their websites. Keeping with the anti-marketing motif, the site is conspicuously ad-free. We sat down with CEO Gordon Gould to discuss consumer buying patterns, the social web, and baby products:

1. What is ThisNext about? What is your business model?

ThisNext is a product discovery and recommendation site led by social influencers. Experts, bloggers and consumers comprise our network of people sharing products they personally endorse to the audience. We launched in 2006, so we are about eight months into our first year.

ThisNext offers marketers and vendors a unique avenue to participate authentically in user-generated discussion around products. Our role as a company is two fold: to facilitate introductions to great new products people wouldn't know about otherwise; and helping shoppers move down the purchase funnel by leveraging the community and engaging brands.   ThisNext uses CPC, CPM and CPA models.

2. Why did you start this company?

I started the company two years ago but the idea occurred to me long before that. When I started having children the parents' community I became involved with educated me on baby products… It was less an individual and more a group of like-minded people.  I rarely responded to advertising, but always responded to recommendations from family, friends and neighbors. By talking to other parents in my group, I became smarter about the things I needed in order to be an effective parent.

It led me to look at the innate behavior of trusting individuals whose lifestyle reflects one's own and realized this was an opportunity to take e-commerce to the next step. This real-world behavior had not yet scaled to the net and presents an enormous opportunity. We're moving into a third-wave of e-commerce where people trust friends and specific points of view more than aggregate opinions. It's about capturing unique and individual insights and leveraging the value of the social web to find and build an audience. Our goal is to build out a way to capture, structure and store these recommendations by individuals.

3. How do you build a community of people who recommend things they like? What’s in it for them?

The driving benefits for participants in the social web are generally recognition, affiliation and monetization. Some people want to be recognized as mavens in areas that are helpful to them others just think it's fun and like to contribute their two cents to the common good. The same reasons why blogs are so popular now. They like having voice.

ThisNext gives people a structured content format to add a product layer to their digital identity. Products are a big part of our life in consumer society and having a useful way to talk about products is beneficial to anyone projecting that identity. A lot of our members are social influencers and respect what we do and that draws other influencers in. If websites try to free ride and scrape content from the people working hard to create it there will be ill will.  There's nothing in it for them.  We see enormous benefit to helping content producers engage meaningfully in relevant group discussion as opposed to being unaccredited fodder for someone's web bot.

4. What impact do you think crowdsourcing will have on the web at large?

Crowd sourcing can be a positive but it can also be a negative when abusive tactics are enacted to take advantage of people’s labor by content skimming. People are doing a lot of work creating quality content and when it's scraped, aggregated and packaged without benefit to the primary producer it becomes unfair and destructive to the model. And, it's against the spirit of the social web.

You need to enable an environment that is valuable where each member of the community feels respected and where the community realizes benefits from their good works. Our platform enables people to input favorite products and then syndicate those tastes out to be discovered by any number of audiences. It's a way to have a distinct voice in the noisy social web. As a result as people discover and connect over common product tastes it drives interest back to the original recommender bringing deserved recognition. It's very cyclical.

5. How big is the market for what you have to offer?

The market is hugely transformative. How many times have you walked into a store and bought something you didn't know you were going to buy or took a recommendation from a friend?  Neither of these behaviors is well served by the e-commerce paradigm.

Estimates put impromptu retail purchases at around $3 trillion a year and total online spending alone was more than $100 billion in 2006, a 24% increase from the year before. Every year the numbers of people shopping online increases and reasons given include saving time and the ability to discover items that aren't in stores. This is a sweet spot where authentic user-generated product discussions are going to carry great influence and move the needle faster than ever before.

- contributed by Jammond Hayes-Ruffin