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And we are delighted to announce that we at CVL celebrated our ninth birthday in October. We have now entered our tenth year of trading - that's longer than Accenture and Capgemini. At least trading by the same name anyway! As usual, I'd love to hear any comments you have on these or any other issues, so do call me on 020 7907 0200 or e-mail: simon.clark@cvluk.com.
The term Web 2.0 was first coined at an O'Reilly Media conference in the States in 2004. According to Wikipedia (itself part of the Web 2.0 storm – more on this later) Web 2.0 “attempts to define a perceived second generation of web-based communities and hosted services such as social-networking sites, wikis and folksonomies….which aim to facilitate collaboration and sharing between users.” In 2006 "You" was awarded Time Magazine Person of the Year, in praise of the accelerating success of on-line collaboration and interaction by millions of users around the world. Wikipedia was the first particular Web 2.0 service mentioned, followed by YouTube and MySpace. Over the last few months Facebook has become the No.1 social networking tool in the UK. Latest stats from Alexa (www.alexa.com) show that the site is now second only to Google, and in the last few days Microsoft invested $240m for a 1.6% stake, valuing the firm at $15bn. What next for Facebook? Since September 2005 when eBay Inc. acquired Skype Technologies, more than a thousand technology transactions worth more than £15 billion have closed. Google's acquisition of DoubleClick and YouTube, Microsoft's acquisition of Aquantive and News Corporation's purchase of MySpace were the most prominent. Ultimately, the value of these acquired companies must reflect the future earnings potential to the acquirer. One has to ask how value is calculated, and whether the economics of the business stack up. The hype surrounding the whole Web 2.0 phenomenon takes us back to the dot.com bubble, with the perception that a sustainable, profitable brand can be created overnight through the power of online networking and user-generated content. We are seeing investments justified using a bottom-up, Discounted Cash Flow approach, with earnings potential only limited by the size of your imagination and with little focus on what makes the business unique – and what the impact of competition will be. The reality is that if you added up the earnings forecasts that underpin all the online business plans they would massively exceed any sensible estimation of the whole market. It is one thing to exponentially increase the number of interactive users engaged with your site, quite another to generate a sustainable revenue stream from them. CVL has conducted some valuable due diligence in just such a situation recently. Despite the target's claims of being the fastest growing such site in their country, the application of a more sensible top down approach to valuation, looking at the forecasted revenue in the context of solid macroeconomic data, actually demonstrated the target was going backwards in a growing market. Cut through all the chatter about RSS feeds, mashups and online social networking and Caveat Emptor remains as true today as it ever was.
We've developed our very own retro online game, and being CVL we think champagne is called for. So high scorers and lucky draw winners can celebrate in style, on us!
With increasing speed of transmission, the web has finally lived up to the expectation that it will provide a channel through which all of us can choose to broadcast our opinions, news, pictures and movies to any other group of people on the planet – from the comfort of our own bedrooms. Log on to the Internet, search around, and you'll soon find on-line radio shows, live webcasts, blogs, social network interfaces, group photo-publishing, podcasts and hosting videos. Many of these will be delivered by experts and commercial organisations, yet many more will be delivered by amateurs, for fun, from their own homes and aimed at people like you and me - in other words, People-to-People Publishing (PPP). The features of the Internet that, bundled together, are called Web 2.0 make all this activity possible. The prevalence of Broadband delivering super-fast Internet speeds underpins the rise of activity. Latest statistics show that currently 40% of UK households have Broadband, and in the next five years this will increase to 55%, fuelling further innovation in this sphere. Switched-on businesses are already developing sophisticated consumer business models to engage with bedroom broadcasters: offering sponsorship deals, paying for advertising, organising in-show promotion and merchandising deals. Other companies are learning to develop corporate business models based around the rise of PPP, including the creation of podcast versions of shows, multi-platforming (mobiles and portable media players (PMP)) and aggregating end-user content to portals. In future, advertisers will need to act on these trends unless they are to lose their ability to broadcast effectively - particularly to the prime 16-34 age group, where blogging, podcasting and online social networking becomes more prevalent than passive media consumption. Broadcasters will have to compete against user-content and user-interaction for “share of attention”, and new technological solutions for in-show ad insertion will become necessary as will greater personalisation for ads. Overall, the commercial impact may be less about absolute audience size and more about access and attention. In turn, advertising models may switch towards relevance of segments, rather than actual viewing figures.
We'd love to hear your views on Web 2.0 and social networking, your suggested topics for future newsletters or just more of the usual rude comments about our Meet the Team photos. If you'd like a FREE copy of 'Inside Facebook', written by an insider and covering the whole Facebook phenomenon, e-mail your comments and suggestions to Bill at bill.james@cvluk.com.
Online social networking has only become part of how we interact in just the last couple of years. Are you taking part in this activity? Is there a way of using Facebook, LinkedIn, MySpace and all the rest for fun and for business, and if so, how? For me, the most compelling thing to come out of all the new interactivity available on the web is Facebook. Facebook is for fun. It was created by and for college kids, and now it has extended to those of us who didn't grow up with the Internet. Have a go - it's easy to set yourself up with an account. Just go to www.facebook.com and click on 'Sign Up'. If you haven't yet tried it and you want to practice by adding a 'friend', feel free to search on Bill James and give me a 'poke' (don't worry, it's a Facebook term for attracting someone's attention). Now even as an older, business-minded generation sign up, I continue to insist this is a network for fun and I like to use it to joke with, and keep in touch with friends. If you feel you want to mix work and pleasure there are some business-related tools amongst all the goofy comments and photos available to members. For example, Facebook makes it easy for anyone to start their own group on whatever topic they like, so businesses can create a company events board, staff intranets, recruitment forums and even customer feedback areas. For a small fee, users can post surveys on any topic and make them available to the Facebook network of their choice – a great market research tool for companies targeting the Facebook demographic of 25-40 year olds. Users can also post events free of charge, invite all their friends, and publicise them within their network and groups. As well as creating a company group with recruitment functionality, companies can also use Facebook to headhunt. Looking for a C# Web Developer in Belgium? Go into the Belgian network and search with C# in the ‘job' field, and see what you can find. And what about Linkedin and Myspace? Well not only was MySpace always aimed at teenagers, but Facebook is overtaking it. As for Linkedin, well it is a great business network and useful for making professional contacts. The downside is that it's really quite boring – and who wants that even in business? Ten things you didn't know about Facebook
Not only have social networking websites made it safer to meet people online, it also allows us to meet people that have the same or similar interests, including those in business. Most social networking websites allow you to create your own profile; in fact, many even give you your own webpage. These profiles or pages will allow you to share information about yourself. Since all other network members should have the same pages and profiles, it should be fairly easy for you to meet up with other internet users, especially those who enjoy or believe in the same things that you do. Bill has already expressed his preference (above). But why not make your own choice about which online social networking group is right for you? Have a look at our short-list of sites and see what suits your purpose. A good rule of thumb is to conduct a quick search and see whether you have any friends or business colleagues already using one of the networks.
Recent Guardian article on Web 2.0 : http://media.guardian.co.uk/mediaguardian/story/0,,2191061,00.html Alexa - see how many people are using your website today: www.alexa.com Watch a video about Web 2.0 on YouTube: www.youtube.com/watch?v=nsa5ZTRJQ5w The biggest free-content encyclopaedia on the Internet. But double-check your data: www.wikipedia.com
We'll be publishing our Newsletter again next quarter. If you know anyone who would like to be on the receiving end of our genius, please ask them to forward their e-mail address to newsletter@cvluk.com. If they let us know it was you that recommended them, we'll send you a copy of 'Inside Facebook' too (although we'll need an old-fashioned snail-mail address from you!)
CVL, 5 Clipstone Street, London, W1W 6BB : Phone: +44 (0) 20 7907 0200 : Fax: +44 (0) 8702 200 874 |
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