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Tuesday, September 27, 2005
How to Dominate Media/Web 2.0 (Special Edition)
"...Mr. Semel describes a strategy built on four pillars: First, is search, of course, to fend off Google, which has become the fastest-growing Internet company. Next comes community, as he calls the vast growth of content contributed by everyday users and semiprofessionals like bloggers. Third, is the professionally created content that Mr. Braun oversees, made both by Yahoo and other traditional media providers. And last, is personalization technology to help users sort through vast choices to find what interests them."
Link.
Wow, what a huge coincidence: Semel's 'pillars' are basically exactly the three economies I've been talking about for a looong time now, and which are spelled out in more than a little detail in my ppts.
Now, leaving the not-so-amazing coincidence aside for a sec, and also leaving aside for a sec the issue of whether Yahoo can execute (dubious, I know), it's pretty cool for the ideas in my work to get this kind of validation.
These 'pillars' are really the fundamental strategic point of all three of my ppts: vertical integration is the dominant Media/Web 2.0 strategy. Why? Because you can realize all three 2.0 economies that way:
1) Network economies dominate search.
2) Viral economies dominate microcontent/communities.
3) Distributed economies dominate personalization/microchunking.
The point is that if you can put all three together, you realize a *huge* scale advantage, because you're realizing nonlinear returns to scale along all three dimensions.
In fact, winning plays can even maximize returns along one or two dimensions in specific verticals (EG Become - viral/network economies for product reviews; SideStep - network economies for travel search); incumbents should be looking to maximize across all three (viz, Google is killer at extending network economies across domains, but notably poor at viral and distributed economies; Yahoo is mediocre at best across all three).
This is what the 2.0 Strategy Space slide below means, and what my latest ppt is about. I think it's a cool way to quickly analyze which Web/Media 2.0 plays are going to be winners; looks like other folks are beginning to agree, whether or not they give me props when maybe they should.
(Link via Nivi).
Comments:
killer post man. this is hot.
# // kid mercury // 4:37 PM
Man, I can't believe that yahoo ripped u off like that.
Boy, you are young. Folks like Steve Case, Tim Koogle, Jeff Bezos were talking up the exact same thing 10 years ago. It's not original.
The difference is execution and the evolution of infrastructure (that affected execution).
You're a smart kid though... keep it up!
Georgie, I'm not claiming Yahoo 'ripped me off'. I'm just pointing out a deep similarity.
Anonymous, the whole point of my recent work is to very clearly differentiate web/media 2.0 both qualitatively and quantitatively from 1.0.
So it should be obvious that I'm not simply saying what Case, Bezos, and Koogle (etc) talked about.
If you think what I'm saying isn't original, I think you don't really get it.
Do I stand on the shoulders of others? Of course. I build on tons of cool economists and strategists. Three of my biggest influences are Gary Hamel, John Hagel and Jean Tirole.
But they have *not* said the same things I am saying. I am not simply regurgitating what they've (or anyone else has) said.
umair:
I think that you are doing great. I am still trying to understand your stuff but if it is as good as you say it is and if Semel indeed took inspiration from it I think you should be happy about it.
Do remember a couple of things.
The best chance you have of becoming a successful strategy consultant is when people copy your ideas. imitation is the best form of flattery.
it is not ideas by itself which can make the difference, it is its execution.
Semel or somebody in yahoo would have come to a similar solution even without your slides (accepting that he took inspiration from you).
The best chance for you would be to publish some stuff, continue to write your weblog and start consulting...
Cheers,
Suhit
BTW, I have much to learn in strategy from you...
# // Suhit Anantula // 3:58 AM
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