Umair Haque / Bubblegeneration

Thursday, June 15, 2006

More Googleverse

Following on from yesterday's discussion.

1) You should read the original post by Erick, and then the ensuing discussion. It's interesting because Erick makes some very cogent points, and then gets flamed for doing so (by linkfarmers/spammers/etc).

That's interesting because it tells us just how powerful the incentives for zero quality a Googleverse creates are.

2) What the �"$�! am I talking about when I say media is cultural/social/human/etc?

Guys, this should be very, very straightforward. Why do people use MySpace, MakeUpalley, and Last.fm (etc)? Because they connect with other people (the social). What's at the heart of this connection? Shared culture.

It is this shared culture that is commoditizing media - not simply technology or the erosion of entry barriers. Shared culture is what makes the economic difference - it is what drives the superior attention economics of markets, networks, and communities - at least on the consumer side (whereas, on the supply side, the game is about achieving discontinuous productivity/efficiency gains a la AdWords).

Now, that has a very straightforward implication: instead of fighting the social and the cultural, firms must learn to leverage it (VCs must learn to invest in it, etc). That doesn't mean investing in content. Rather, it means investing in, essentially, social and cultural capital.

Does that sound woolly? Probably. So let's try and make it more concrete. It's exactly what Fox has done by investing in karaoke, sports, and social nets. It's exactly what the Myspace guys built. It's exactly what happened at Habbo Hotel, World of Warcraft, Suicide Girls, Metafilter, Big Brother, and countless other media snowballs of the last decade.

You can refer back to my Fox vs Denuo investment thesis research note from a few weeks back if you want to dig in to more of this.

-- umair // 4:22 PM // 5 comments

Comments:

So are you suggesting that perhaps the medium is no long the message? That it really is just a conduit and as its commoditization increases our awareness of it, and its relevance as being the message, decreases?

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Anonymous // 6:26 PM

Hey Niblettes,

That is a great comment.

I think that is relationship is undergoing huge changes - I think it was Doug Holt who said in 2001 that "the messenger is the medium". Which way that will play out bears a great deal more thinking about.

Not a bad starting point for the McLuhan school to regain a lot of the relevance they've (imho) lost.

Thx for the comment.

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umair // 7:16 PM

Great discussion.

"Just a conduit"? Maybe in that shift the conduit (e.g. web service like flickr or myspace) has become the message? or have I perhaps misunderstood what you consider as the "medium"?

Conduits are still far from transparent, and often act like straightjackets for presenting otherwise microchunked data, apart from their social networking functions. Isn't there so far a slight tendency of Web 2.0 to become Web portals 2.0?

z

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Anonymous // 1:48 AM

It is this shared culture that is commoditizing media.

Good one. :)

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Anonymous // 4:52 AM

Umair,

Your research is intensely interesting and I am always on the edge of my seat, wondering what analysis you will put forth next. It's truly a joy reading you.

Now, I completely buy your notion that shared culture is commoditizing media - that is the cultural activities of people within communities creating and reconstructing their own messages with chunks of this and that - ignoring the highly inefficient "media packages" of the day.

However, how is one supposed to invest shared culture before it has become a snowball? You mention that VC's, etc are to tech-centric, throwing their money away on plays that appeal to geeks only. I am sure that is not their intention.

Fox has the means to invest in an existing snowball, for which they paid handsomely. But VC funding levels don't buy you a snowball.

$10 million doesn't buy you a shared culture phenomenon. It buys but one thing: An idea, or a hope, centered around a new technology. And, of course, it is hit or miss - but that's the nature of the VC business.

Thus, doesn't the problem become what new technology (i.e. new web service, portal, platform, etc) has the best hope of creating a new conduit for shared culture - with killer economies of market, network, and community?

Or am I completely missing your point yet again? :-)

jim

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Anonymous // 4:45 PM