ReadWriteWeb

July 2006 Archives

Read/WriteWeb sponsor packages available

By Richard MacManus / July 26, 2006 6:19 AM

premium blogAs Read/WriteWeb continues to evolve and ramp up its traffic, I've found that it's consuming more and more of my time. I love it of course, as this blog is (and always has been) my passion. I've recently had a re-design and I've been putting a lot of effort into the content - making sure it's high quality, plus hitting its target niche of covering web 2.0 market segments and Web/media innovation.

In short, my goal with Read/WriteWeb is to provide premium quality content, focusing on high level analysis and industry insights. So it's very much quality over quantity, although I still aim to pump out 1-2 decent posts per day.

In line with my site goals, and in order to justify my ongoing time investment in R/WW, I'm now making available more premium sponsor slots - in addition to my current premium sponsor Atlassian. They will be located in the top-right corner of all pages and are a monthly flat rate. My pitch for this is: Premium Sponsors deserve Premium Content (or is it the other way round?). Think of R/WW as like a premium beer, exported from New Zealand no less :-) NB: the photo above is derived from such a product.

A lot of popular blogs are doing sponsorships these days - TechCrunch of course, which Mike Arrington has done an amazing job of growing to its current position, Om Malik's GigaOm, Rafat Ali's PaidContent, Pete Cashmore's Mashable, Tom Foremski's Silicon Valley Watcher. These are all sites I admire greatly - and their owners are all making a go of turning their blogging passion into self-sustainable businesses. I'm hoping to at least hold my own amongst those stellar bloggers, in my own little niche of course.

Email me if you'd like to enquire about sponsoring R/WW.

Unlocking MySpace's Value

By Richard MacManus / July 25, 2006 6:49 PM / Comments

Murdoch and friendThe media blitz from News Corp. executives on MySpace is increasing, with two excellent articles on The Hollywood Reporter and Washington Post.

In The Hollywood Reporter, Fox Interactive Media president Ross Levinsohn says that social networking is just a platform for "peer recommendation" services:

"What's next for FIM is leveraging MySpace's online community and communication into a peer recommendations framework for leads on everything and anything: the best children's playgrounds in Los Angeles to the best concert seats in Madison Square Garden to the best steakhouse in Dallas. Such peer recommendations provide a gentle seaway into targeted, fine-tuned behavioral marketing for national and local advertisers wanting to reach MySpace's 15- to 34-year-old core user."

This is apparently going to add to the bottom line, with MySpace's much-maligned inability to monetize set to change:

"The prospects for generating revenue and profits are just as limitless. Murdoch said FIM will post at least $350 million in revenue this year, up from $47 million last year, and at least $500 million in 2007. Some analysts, who expect MySpace revenue to top $1 billion by decade's end, say the site will turn profitable this year with about $13 million, and that could increase to $50 million in profits in 2007."

Advertising is what is going to drive this growth:

"About 80% of MySpace revenue will continue to be generated by advertising, with the remainder coming from subscriptions, fees and transactions."

Since acquiring MySpace nine months ago, its user base and revenue have more than tripled - according to the article. For all that, there's a lot of infrastructure work to be done before Levinsohn's big projections have a chance of coming true (which he acknowledges). And there's still the small matter of MySpace's extremely low average CPM to overcome - by most accounts currently less than 10c per 1000 page views. 

For a higher level view of MySpace's future, check out Internet seer Rupert Murdoch's interview on WashingtonPost. He says that "we have to find ways, without destroying its character, of getting more advertising revenue." And therein lies perhaps MySpace's greatest challenge - monetizing their core user base, without driving those same users away to the next big social networking system.

See also my earlier post: News Corp: portals are out, mini-portals in

Photo: jasoneppink

Search 2.0 vs Traditional Search, Part 2

By Ebrahim Ezzy / July 25, 2006 2:17 AM / Comments

Written by Ebrahim Ezzy and edited by Richard MacManus. Ebrahim is lead developer and co-founder of Qelix Technologies, the company behind a search 2.0 contender called Qube. This is the second in a 2-part series of posts.

Search 20

In our previous post we coined the term "Search 2.0", in order to compare third-generation search technologies (of, or pertaining to, the current era of social web) with traditional search engines - to see where the future of search lies.

Even if some of the startups we're profiling in this series may not survive the next Internet bust, the underlying ideas are evolutionary and have proven to be effective so far. We think the ideas showcased by these new social search apps are worth embracing, to ensure the future growth of the search industry. And, as we note at the end of this post, the big search companies (Google, Yahoo, Microsoft) think so too... 

Here then are some further profiles of search 2.0 apps, followed by our analysis of where the search industry is headed.

Gravee

graveeWhile the new generation of search engines all have great technology, one area of concern is that most have no viable business model to support their operations. However Gravee is one that does have an interesting business model. Indeed it is attempting to change the economics of search, by sharing advertising revenue with the content owners and compensating them for making search results possible.

While this is a potential revenue opportunity for website owners, it doesn’t provide any visible value to end-users on the search side - apart from pseudo-useful features like tagging and community-based ranking.

Unique Feature(s): Revenue sharing

Jookster

jooksterJookster is another community-driven, social search tool and it works primarily through a browser toolbar or button. It searches through a user's bookmarks and other associated sites of interest, derived from the user's social network. Essentially, it’s a cross between social networking and search.

Ironically, there are more ads than organic results to almost any query; perhaps the database is currently very limited due to the lack of significant user base.

Unique Feature(s): Social networking blended with search

Other similar services: Otavo (Private Beta); Outfoxed; Yoono

Krugle

krugleA search engine for developers, Krugle makes it easy to search for technical information, source code and answers to code-related technical questions. It enables searching of code samples from open source repositories, archives, mailing lists, blogs and web pages. It allows tagging, along with sharing of code and sets of search results.

Krugle delivers the precise help and knowledge that programmers need to solve their immediate problems.

Unique Feature(s): Interactive browsing in code context, Connects developers

Other similar services: Koders

LivePlasma

LivePlasmaLivePlasma is a visual music and movie discovery engine that covers bands, artists, movies, actors and directors - in a multilingual interface. It features a Flash-based data visualization tool and utilizes mind mapping. It's really a recommendation engine, because the aim is to discover similar music and movies. This may be useful when you're searching for new music or movies to explore. 

Unique Feature(s): Similarity Network Mapping or Mind Mapping, Recommendation engine

Other similar services: Truveo, Pandora, Last.fm

Qube

QubeQube is a desktop application that provides one-click access to search results - without having to use a browser, switch applications or even enter a keyword. It instantly searches any text already onscreen (or manually entered) and retrieves results in seconds, while also enhancing the search with features like real-time spell checker, history logging, dictionary results and more - all without any performance penalties.

Unique Feature(s): One-Click, Browserless & Progressive Search, Intelligent Text Capturing

[Disclaimer: Qube is Ebrahim Ezzy's company]

ZoomInfo

ZoomInfoZoomInfo scours the web (corporate websites, press releases, electronic news services, SEC filings and other public online sources) for people and their contact information. It compiles concise summaries about individuals and companies, in an organized manner. Social networking tools are available if you choose to be their customer.

With the growing Web population, there is a significant demand for a 'people search engine'. While TSEs like Google already contain large amounts of similar data, specialized people search engines process the data and present it in a comprehensive format.

Unique Features(s): Concise web summaries, Social networking aspects

So why use a Search 2.0 app over a TSE?

Traditional search engines are becoming increasingly more precise and expansive, however they cannot surpass human intelligence. It can only match words, not the meaning of the ideas discussed within them. Whereas the still-emerging technologies of S-2.0 can help make search more meaningful, subjective and task-based.

While TSE is good for finding information, S-2.0 is good at discovering new information at a rapid pace. 

S-2.0 enabled data is distributed through the lateral route of a user's interests - rather than the direct route of TSEs, which require a user to carefully craft his/her query to be an accurate statement of the information desired.

Can search 2.0 replace traditional search, ever?

Like metasearch, current S-2.0 technologies do not replace traditional search engines. They rather enhance and grow new possibilities. They work in conjunction with TSEs to provide a more powerful search.

Search 2.0 is rapidly evolving and proliferating, but still can't compete against traditional search. We have yet to see an application that blends the capabilities of Search 2.0 and traditional search synergistically, giving us exactly what we want. It’s likely that something will eventually replace TSE - perhaps there are two kids busy working in a garage as we speak, creating a future GYM competitor!

How is traditional search evolving to Search 2.0?

Perhaps a better way to look at this: how is traditional search evolving to become more personalized and specialized? 

Already we're seeing the big Internet companies moving towards the search 2.0 vision. Yahoo has a social search play called MyWeb 2.0 and is integrating more and more social aspects into its search. Google has quietly introduced bookmarking and tagging for search history and also has aspirations for social search. Microsoft's MSN is looking to get social too.

While the intelligence required to conduct social search still resides in people, the key to harnessing it lies in the network. TSEs have greater opportunities for traction, with their substantial user bases - a key ingredient of any social network. 

So this is more evidence that the latest search revolution is just getting started. Make way for social search!

Gotuit Launches Broadband Video Portal

By Richard MacManus / July 23, 2006 9:00 PM / Comments

GotuitGotuit Media, an established player in on-demand video, today announced the launch of its new broadband video portal - Gotuit.com. I got a sneak peak of the new portal and spoke with Mark Pascarella (president of Gotuit Media) and David Laubner (Director of Product Marketing) about the launch. 

Gotuit.com is a free service. It offers instantaneous video delivery of a variety of professional media content - e.g. mainstream music and sports. The UI is slick and navigation between videos is pretty much seamless. But the most exciting part of Gotuit.com, for me, is its ability to search inside a video item. For example you can do a search for "Lance Armstrong" and it'll deliver a set of video snippets that feature the 7-time Tour de France winner. This is possible because Gotuit employees have indexed metadata for all videos on the service (more on this below). Users can also create playlists based on keywords - and share those with other people.

Gotuit was founded in 2000 and up till now has been mainly focused on the cable TV industry - competing with TV networks, like HBO and Showtime, that offer on-demand video. Apparently they are the number 1 VOD and music on demand provider in the US markets they are distributed. Now Gotuit is entering the broadband tv market, plus it has big plans for mobile tv later this year. 

Why Gotuit is different

What differentiates Gotuit from the likes of YouTube and Google Video, is twofold:

1) Gotuit is strictly about professional content. It's partnering with mainstream media video producers - e.g. Universal Music, Warner Brothers, Reuters - to serve up content across 4 main categories: Music, Sports, News, and Entertainment. It has the latest music videos (ref: Nelly Furtado screenshot below), movie previews, short films, sports news and clips, and more.

Gotuit Music
The latest Nelly Furtado music video on Gotuit

Gotuit is also a platform for advertisers - I think its ability to target ads will be increasingly appealing as mainstream media moves online. Plus Gotuit will be announcing co-branded partnerships with mainstream content providers, whose online video will be powered by Gotuit. 

2) The technology is more advanced than their Internet competition currently. Gotuit has instantaneous video delivery - it is streamed directly to the user's PC and so there's no buffering or download. 

Also it has the 'search inside the video' feature I mentioned above. How is that done? Mark Pascarella told me that in the current broadband video market, there's a need for "a better, richer set of data for video search". So to meet that need, Gotuit has built a system which enables them to 'tag' specific points inside each video with appropriate metadata. Mark said this system is "a highly-automated process that involves human oversight for the creation of that data." So to be clear, the video metadata is not entirely automated - and indeed currently it is collected by Gotuit staff. However Mark told me that this metadata technology will be provided to content owners in the future.

Context: Broadband Video Market

The broadband video market is one that has a lot of activity right now, because a) video is seen as the next frontier on the Web; and b) many people see broadband video as the next generation of television. All the big Internet companies have a presence in this market - Yahoo, Google and MSN have fairly similar video search platforms. One company in particular is making big waves in broadband video - YouTube, which has grown like wildfire in 2006 and is (by far) the market leader now.

In many ways though, the current broadband tv market is primitive in nature. Few mainstream media companies have adopted online video content in a big way, except for relatively minor deals between old and new media. For example, NBC hooked up with YouTube - but really only to show tv promos on the upstart YouTube.

How Gotuit will fare in this market

I'm expecting Gotuit to make a big splash in broadband video. The technology they offer seems a big step up from the likes of YouTube and Yahoo Video. But having said that, in terms of the type of content it offers - it doesn't really compete with the incumbent Internet companies. YouTube and the big Internet companies are largely platforms for amateur video content, whereas Gotuit is squarely aimed at putting professional video content online. 

Gotuit Sport
Gotuit playlist of Xtreme sports wipeouts

Ultimately Gotuit is probably going to be competing against the big TV networks. So I suspect there is plenty of room right now for all the existing broadband video players, plus Gotuit.

VC Web 2.0 List: Big Money For New Media and Marketing Companies

By Richard MacManus / July 23, 2006 4:55 PM / Comments

SiliconBeat has published a list of all "Web 2.0 companies" that received venture backing over 2005 and so far in 2006. The list was created by PricewaterhouseCoopers and the National Venture Capital Association. In the comments to SiliconBeat's post, two prominent 2.0 VCs have dissed the list. Peter Rip thinks it's "ridiculous", saying that "Web 2.0 is an investment fad, for sure, but this classification is pointless in its generality." Brad Feld agrees with Peter, noting that the classification is awful. 

Be that as it may, the list is a useful resource - at least in terms of quantifying certain things. 

The most interesting analysis I can think to do on it right now is seeing which companies have received the most funding. The resulting tables are below.

In 2005 Vonage got a staggering $200 Million in VC backing, while a company called Datran Media Corporation (according to its website "a leading performance-based marketing company") garnered $60M.

Meanwhile in 2006 Sling Media (a TiVo competitor in the digital television space) has raked in $46M so far this year, with advertising software company Claria Corp (formerly Gator Corporation) pulling in $40M. ePrize, which bills itself as "an interactive promotion agency" is third on the 2006 list. RazorGator is another which has received over $20M in 2006 - they're an event ticket sales company.

While I haven't digged deep into the spreadsheet that was kindly offered up by SiliconBeat, it does seem noteworthy that the companies receiving the most funding are media, advertising/marketing and e-commerce businesses. Indeed recently I noted here on Read/WriteWeb that online advertising is hot in 2006 - and that seems to be borne out in the VC investment list.

When it comes down to it, there aren't many companies in the tables below that I'd have immediately classified as "web 2.0". Let's see... definitely Riya, Zimbra and Sharpcast - maybe a few others. But it seems the startups attracting VC dosh are in the new media, marketing and business sectors. Is that really a surprise? I'd suggest a little bit, but then a lot of so-called web 2.0 companies don't require a lot of cash to do business (one of the hallmarks of this current era). 

On the other hand, it perhaps does suggest that the real money in this era will be made not on the trendy web 2.0 companies - but on the new media and marketing businesses. Thoughts anyone?

Weekly Wrap-up, 17-21 July 2006

By Richard MacManus / July 21, 2006 5:14 AM / Comments

Long-time readers of Read/WriteWeb may recall that I used to do a weekly summary of the top stories of the week, called the Web 2.0 Weekly Wrap-up. It ran all through 2005 and for a long time was the most popular feature on R/WW. I decided to put it to one side at the start of 2006, but now may be a good time to resurrect it...

Netscape's offer and Flickr's clogged tubes

flickr tubesPR over Netscape's community news re-design went from bad to worse with a NY Times profile on Monday (btw I was interviewed for that, but much to my disappointment my remarks were left on the cutting room floor). Later in the week Jason Calacanis turned up the bluzzometer (which is a blog buzz measuring tool) with his offer to pay the top bookmarkers at Digg, Reddit, Flickr and other places $1000 per month for doing their thing on Netscape.com. In my post I noted that this essentially amounted to an offer to buy out digg users.

From the 'It ain't broke, honest!' department, MySpace had some issues with hacking and Flickr had a "temporary storage glitch" (see image to the left, by ASurroca).

Meanwhile young YouTube hit a stats milestone this week, with the news its users are now watching more than 100 million videos per day. Later in the week there was some controversy about content ownership on the service.

BigCo Action

The week started with lots of Yahoo news. They released their new Ajax-powered homepage to the masses and also gave Yahoo Finance a facelift. Things turned slightly custardy later in the week though, when Yahoo's stock went down after their second quarter results. Apple reported rosier third-quarter results, eBay also announced earnings, Microsoft had its 4th quarter results and (to complete the set) Google announced its Q2 results.

Microsoft announced a partnership with Nortel around "unified communications" - meaning e-mail, IM, telephony, and multimedia conferencing. Microsoft also made blog headlines by pledging to play fair with others, in a set of 12 principles.

Neil Patel wrote a great post detailing Google's growing list of domains - they now own 520 of them. My favorite: richardsbrain.com (I'm afraid, very afraid...). In other Google news, one of their execs had the nerve to challenge the Father of the Web Tim Berners-Lee.

Scoop of the Week

ThinkSecret scooped the news that Apple will announce movie rentals through the iTunes Music Store, at Apple's upcoming Worldwide Developers Conference in a few weeks. For reactions, check out the TechMeme scrum about the story.

Product Plays of the Week

In product news, podcasting startup Odeo released a new service called Twttr - described by Sid Yadov as "a new tool which helps you stay in touch with your friends through SMS".

In search news, Ask.com released a product called RSS Smart Answers and Google released a product called Accessible Search - a "web search for the visually challenged."

On the enterprise side, Salesforce.com released Summer '06 - 20th generation of their online CRM service (see also my interview).

Buys of the Week

RSS feed management powerhouse Feedburner purchased RSS analytics startup Blogbeat. Microsoft was busy this week, acquiring Softrucity Inc. (a provider of application virtualization and dynamic streaming technologies) and Winternals Software (a small maker of Windows utility programs). From the 'I want a piece of that action' dept, Amazon Jeff Bezos is investing in trendy web design firm 37Signals.

Pageturner of the Week

By which I mean, best analytical post (not counting my own posts, of course). Tim O'Reilly's 'Levels of the Game: The Hierarchy of Web 2.0 Applications' is required reading for those who want to understand "the dynamics of the network economy", as he put it.

Blog headline of the Week

Mike Arrington's TechCrunch protege Marshall Kirkpatrick came up with the memorable headline: Got Herpes? Try Prescription4Love. I'm guessing it was a deliberate ploy to get on Valleywag.

On that dodgy note...

That's a wrap for another week! (yes, my old catchphrase is back too)

Search 2.0 vs Traditional Search

By Ebrahim Ezzy / July 20, 2006 2:57 AM / Comments

Written by Ebrahim Ezzy and edited by Richard MacManus. Ebrahim is lead developer and co-founder of Qelix Technologies, the company behind a search 2.0 contender called Qube. This 2-part series of posts is adapted from Ebrahim's research material in developing Qube. [update Part 2 is here]

search 20

Let's start be defining what we mean by "search 2.0" vs traditional search.

Traditional Search (TSE):

Traditional search engines are based on information retrieval technologies. They implement operations such as boolean queries, proximity searches, text relevance and link analysis.

Examples: Google, Yahoo, MSN, Ask

Search 2.0 (S-2.0):

What I'm calling Search 2.0 are actually third generation search technologies. To explain the generations:

  • First-generation search ranked sites based on page content - examples are early yahoo.com and Alta Vista.
  • Second-generation relies on link analysis for ranking - so they take the structure of the Web into account. Examples are Google and Overture.
  • Third-generation search technologies are designed to combine the scalability of existing internet search engines with new and improved relevancy models; they bring into the equation user preferences, collaboration, collective intelligence, a rich user experience, and many other specialized capabilities that make information more productive.

Examples: Swicki, Rollyo, Clusty, Wink, Lexxe

The Search 2.0 Companies (Pt 1)

Search is a multi-billion dollar market and a lot of startups want to be 'the next Google' So lets take a look at what current hot technologies are shaping the future of search.

Swicki

swickiSwicki is a community-driven search engine that allows users to create deep, focused searches on a specific niche. Search results from a Swicki are more focused than a TSE and can learn and adapt automatically, based on the search behavior of the community.

Key Feature: Pattern recognition and Adaptive filtering

How it is useful compared to TSE?: Sometimes, looking for specific information in huge web indexes is so mystifying that users feel lost. Services like Swicki promise to accelerate the evolution of Search, by providing hyper-contextual (to use Mike Arrington's term) search results.

Rollyo

rollyoBoth Rollyo and Swicki pursue a similar goal: community powered, theme-based search. Rollyo allows users to create and publish their own personal search engines, based on websites they decide to include in their 'SearchRoll'. SearchRoll doesn't replace a TSE, it's just a great way to search your favorite things in your favorite places.

Key Feature: Community-driven Search

How is it useful compared to TSE?: It narrows your search down to only a few trusted sources. A welcome retreat from the current in-your-face information chaos of the web.

Clusty

clustyAs the name suggests, Clusty is a clustering engine that groups similar items together - organizing search results into folders. It goes beyond simple search and combines the power of clustering with meta-search (i.e. a search of other searches), to provide a productive and flexible search experience. As well as producing organic web results, Clusty also enables searching of shopping information, yellow pages data, news, blog posts and images.

Key Feature: Result Clustering

How it is useful compared to TSE?: The competition has shifted from crawling the web and returning search results, to adding value to the information that has been retrieved. Clusty has a few advantages over Google:

1) You don't have to come up with your own categories or subjects in order to narrow, or refine, the search.

2) You don't have to rely on Google's perceived emphasis on links.

3) You don't have to guess the keyword, to get to that perfect page you need. Navigate the clusters and sub-clusters, just as you would use eBay, to find that one specific treasure you've been hunting for.

Wink

winkUsing the power of social networking, Wink enables users to tag their favorite results, block irrelevant spam and display the best sites - as hand-picked by other users.

Key Feature: Collaborative Search

How is it useful compared to TSE?: Humans can recognize spam better than any automated filter. Social Search battles search manipulation (i.e. Black Hat SEO) by allowing users to block spam directly. However, one issue is that this system can be easily gamed. But if improved, Wink can deliver a leap in value to Web searchers.

Lexxe

lexxeLexxe does what TSE's already do, but more efficiently. Lexxe is designed to extract short answers on-the-fly, instead of finding the page on which the answer might be located. It emphasizes the processing of language rather than symbols - using the level of words and the meanings associated with them.

Key Feature: Linguistic Search

How is it useful compared to TSE?: Although they claim to be "50% more accurate and relevant than any other search engine, including google", I'm not convinced. However, they do have mechanisms in place to determine fairly accurate answers for short questions, compared to Google. For example: Who was Louis-Nicholas Vauquelin? Compare Google's answer to Lexxe's.

Summary

That wraps up Part 1 of our look into Search 2.0. In the next installment we'll be looking at other notable contenders like Jookster, Gravee, PreFound and Ebrahim's own company Qube. We'll also address questions such as:

How is traditional search evolving to Search 2.0? Can Search 2.0 replace Traditional Search, ever?

Update: Part 2 of this series is available now, with more profiles plus an analysis of how traditional search is evolving towards social search.

Calacanis offers to buy out digg users

By Richard MacManus / July 18, 2006 9:54 PM / Comments

Netscape boss Jason Calacanis has offered to essentially buy out the top users on Digg, Delicious, Flickr, MySpace, and Reddit for $1000 per month:

"We will pay you $1,000 a month for your "social bookmarking" rights. Put in at least 150 stories a month and we'll give you $12,000 a year. (note: most of these folks put in 250-400 stories a month, so that 150 baseline is just that--a baseline)."

This offer is open to about a dozen people initially. You've got to hand it to Calacanis, he is a very savvy businessman and this offer will really stir the 'community news' pot. The cynic in me says he's decided to do some 'offensive defence', to try and put the New Netscape troubles behind him. And money talks.

But put this into context of my post yesterday about Digg's stats, where I noted that a select group of digg users are highly influential, and it makes perfect business sense. Among the top diggers are people who have submitted over 1000 stories to digg, with a 25-40% success rate in getting those submissions to the digg homepage! If you do some back-of-the-envelope calculations, you quickly see that paying those top diggers $1000 per month is a pittence for what Netscape will reap - hundreds of thousands of extra pageviews per month, maybe millions. This will come from increased quantity of stories, as well as the 'quality' that Jason talks about at length in his post (unfortunately quantity still rules on the Web though).

Not to mention the fact that those ex-digg users will bring across probably a good proportion of their friends to the Netscape system, which will put a huge dent in digg's page views too.

The big question though is: what is the price of a top digg user? Everybody has a price. How many of those top digg users will accept $1000 per month? It'll be very interesting to find out... oh and although Jason Calacanis mentions Flickr, MySpace, etc - it's pretty obvious who he really wants! BloodJunkie, gwjc, digitalgopher, dirtyfratboy (some top digg users) - what's your price?

Internet advertising companies hot in 2006

By Richard MacManus / July 18, 2006 4:57 PM

online advertisersThe June 2006 edition of Business 2.0 magazine lists the 100 fastest-growing tech companies of 2006. One trend that has emerged is that online advertising has replaced retailing as the Web sector that is most in demand. While in 2005 eBay was ranked 14 and there were two other retail companies in the top 20, this year eBay is ranked 92 and its the only retail company in the entire top 100. 

On the other hand there are now two online advertising companies in the top 10 in the 2006 list - ValueClick (#5) and aQuantive (#7). Digitas comes in at #54 and two Chinese online advertising companies - Sohu.com (#32) and Sina (#52) - are in the top 100.

BusinessWeek notes that the Internet ad market grew to $12.5 billion last year, a 30 percent increase from 2004. All other reports I've been reading indicate that there is much more growth to come. 

Digitas is currently the market leader in online advertising. It creates online ad campaigns for big clients like American Express and GM, "which together accounted for nearly half of '05 sales". The second biggest player in this market is aQuantive.

The Chinese market is obviously one to watch - "Web advertising is growing three times faster in China than in the States; Sohu is the top seller, with rights to represent the '08 Olympics in Beijing."

Google, MS, Y!, Ask: 20%+ revenue from toolbars?

By Richard MacManus / July 18, 2006 4:13 PM / Comments

google toolbarMarkus Frind is one of the more disruptive (and therefore interesting) bloggers to emerge this year. He's the guy who burst onto the scene with claims that he's making $10,000 per day off his online dating site PlentyOfFish.com. I actually met Markus in person last month at the Supernova conference and I can confirm he's a very smart cookie (and a nice person to boot). Anyway his latest post makes the claim that the big Internet companies make upwards of 20% of their entire revenues from toolbars. Here's how Markus summed it up:

"Toolbars are the major battlefield that NO one wants to talk about. Everything being done today by Microsoft, Yahoo and Google is to get their toolbars on peoples machines. Google did a deal with Sun, Dell and firefox to push their toolbars. From the above news release I suspect Ask.com is currently getting ~30-50% of its revenues from its toolbars, Microsoft, Yahoo and Google are probably at 20%+ of revenues."

He contends that Ask.com makes 30-50% of its revenue via adware, smileycentral.com and toolbar installs - which is something that I'd love to get an official comment on by Ask.com! 

According to Markus the big Internet companies are earning over $20.00 per toolbar user per year, so it's big money when you add it all up. Still, maybe I'm naive but I find it hard to fathom how toolbars can make up 20% of a big companies revenue. What do others think?

UPDATE: I emailed Ask.com and received the following response from Scott Garell, CEO of IAC Consumer Applications and Portals. Note that the toolbar business is not in the Ask.com side of IAC, though it was previously owned by Ask Jeeves.

"Just like our competitors, you are correct in asserting that our toolbar business is very healthy. However, your assertion regarding the adware question is not correct: SmileyCentral and all FunWebProducts are unequivocally not adware or spyware. These products do not serve or facilitate contextual or pop-up ads, do not monitor the sites a user visits, do not monitor a user’s behavior on the Internet, and do not log or track keystrokes. Major anti-adware programs do not flag FunWebProducts, including those from Pest Patrol, AOL, Norton, Lavasoft, Webroot and Symantec."

Thanks Scott for the response.

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