ReadWriteWeb

In August AOL acquired online communications startup Userplane - which runs a suite of chat, IM, A/V Recorder, search and presence tools. AOL is in the midst of a big shift in businenss models - from closed 'walled garden', to a more open, web services-driven portal offering. For example AOL is to end its reliance on dial-up subscription fees and offer its e-mail service for free. It will also grow its online advertising revenues, to become more like its rivals Yahoo, Google and MSN.

So what impact will Userplane and its nimble startup values have on the giant AOL? As it was put to me in an introductory email from Userplane:

"Though small, Userplane is poised to have a big impact on AOL, because it already does what the old AOL could not. Positioned as "the open arm of AOL," the company provides Web-based instant messaging and live audio/visual chat to more than 100,000 online communities, from the behemoth that is MySpace to the tiniest niche online dating site. What's more, Userplane already delivers more than 1 billion ads per month to more than 40 million users in 25 countries."

I interviewed Userplane co-founder Michael Jones to find out more...

R/WW: Firstly, congratulations Mike on the deal with AOL! Can you tell us how Userplane has been integrated into AOL so far - what kind of things are you focusing on first?

Mike: Thanks! It has been a busy last few weeks, becoming acquainted with AOL and the lead management of AOL. Our current focus remains the same – building out our network and product suite to enhance external online communities. Personally, I've been having an interesting time becoming familiar with the inner workings of AOL and finding areas where the Userplane team can add value.

I've also come across some impressive products that the AOL and AIM teams have built over the years—products that will be strong enhancements for Userplane clients. Part of our strategy includes embracing these products and putting them into formats that can be used to improve external online community interaction.

R/WW: You say (in the email I received) that Userplane will help AOL "embrace openness" - do you think AIM will become a completely open platform in the near future, with open APIs and ability to chat with other IM systems? Or will it be a slower gradual transformation which may take many months, given AIM's size and AOL being such a large organization?

Mike: I believe that AOL has a focus on openness just as Userplane does, and that philosophy absolutely applies to AIM. As we grow and develop into AOL 2.0 : ), there will be many new open aspects to our entire offering. I'm a personal proponent of building tools that are best suited to users’ needs and believe interoperability is one of those requirements.

R/WW: How much of an influence do you think Userplane will have in changing AOL's culture into a more open and innovative one? I've actually been pretty impressed so far with their AIMPages initiative, which seems a lot more open than some of the other big companies. So is acquiring Userplane simply another step in that direction, or is there something unique that Userplane brings to the table that will transform AOL?

Mike: We expect Userplane to have a great influence on the future of AOL's strategy and culture. One aspect that is interesting about the acquisition of Userplane is that Userplane primarily is a company built around interfacing and enhancing other properties. We offer a unique channel to support AOL's open initiative. I'm often asked if Userplane will continue to support its clients, and the answer is "of course.” We're a company built around the open relationship between companies through mutually beneficial tools and applications. Userplane represents a new way for companies to develop a relationship with AOL and allow them to benefit from AOL’s size and expertise.

AIM Pages is an interesting property. It was a strong initiative within AOL and executed in record time. Social networking is now on par with email and search. MySpace has planted a flag and claimed the social networking space, which is very impressive. We currently work with MySpace on their Web IM, Web Presence and Webchat and hope to continue supporting these efforts with properties that work in an open manner.

R/WW: While AOL is making moves to become more open, we're not seeing the same openness from other big companies - like MySpace or even Google. Do you think that AOL and perhaps others like Yahoo can take a leadership position here and (over time) compel the laggards to open up too? I'm thinking particularly of social networking, where industry-wide open APIs would make Userplane/AIM interoperable across multiple social networks.

Mike: The interop of Userplane is interesting. I'm also a believer in opening user profile databases to better enable users to control their individual identities within all these social networking sites. I think AOL is making strides in this new open direction, but that’s largely been overlooked by the media and Silicon Valley crowd. Open infrastructure is on the minds and tongues of most large Internet companies, and one of my goals is to make sure AOL continues to pioneer it.

R/WW: Finally, Read/WriteWeb is a blog focused on next generation Web Technology. Can you tell us what new functionality Userplane has in store that will knock our socks off? ;-)

Mike: Sure. In addition to the much anticipated AIM interoperability, you can also expect some new interactive experiences in actual applications. We'll be launching games soon, along with an innovative buddy list, which will drastically increase overall community activity on all our sites. In addition, we expect our desktop product -- which is currently rolling out of testing and into live deployments -- to be a significant market mover for us. Bringing Userplane down to the desktop will be a major shift for online communities overall – it should substantially increase overall community activity and messaging – and level the playing field for all communities, desktop or web based!

Written by Alex Iskold and edited by Richard MacManus.

DEMO conference - the premier launchpad for new technologies - has unveiled its list of companies selected to launch at DEMOfall '06. For the past sixteen years this event, produced by Chris Shipley, has attracted premier journalists, venture capitalists and corporate executives. The demo has been a sought after stage by many technology startups; just recently it featured BiggerBoat, Blurb, Kaboodle, Krugle, Kosmix, RawSugar, Riya, Six Apart and TagWorld just to name a few.

The DEMOfall '06 will take place in San Diego, September 26 - 26, in Sheraton San Diego hotel. I will be attending, since my company adaptiveblue was selected to participate. Richard asked me to send a few live updates from the conference, so stay tuned for interesting presentations and breaking news. In the mean time, here is a chart of all the 67 presenting companies - with a brief description of their products. These are startups presenting their products to the world for the first time. Please let us know which of these companies look intriguing to you.

Company	Technology	Description
3jam	Group text messaging	Staying in touch with friends is everything, and text messaging is a great way to do that. But regular text messaging doesn't let you easily send a message to a group of friends. And there is no way for your friends to reply-all. Now, 3jam makes it fun and easy to coordinate and connect with your friends. And it works on any kind of mobile phone.
4info	Mobile search	4INFO is a mobile search service for live sports, business, travel, local, and entertainment information on your cell phone.
adaptiveblue	Smart browsing	With the blueorganizer Firefox extension, your browser becomes smarter. It helps you personalize your web experience based on what you already like. It harnesses your information to help you discover relevant new information and save time.
AddThis	Content distribution	An easier way to distribute and collect things online!
Be Here	VoIP collaboration phone	TotalView combines audio conferencing, videoconferencing, and data collaboration in one compact and affordable center-of-the-table device. With TotalView, the time is now, and the place is wherever you are in your business day - at home base or on the road, in your office, conference room, or across the globe.
BriteSoft	Application developement tools	BriteWorks is a development environment which enables you to create enterprise class applications without writing a single line of code. The result - unprecedented productivity and time-to-market, 20 times faster, 10 times cheaper and with improved quality.
BuzzLogic	Social marketing	The BuzzLogic service is built around an intuitive, easy-to-use dashboard that quickly guides users to the conversations, influencers and content they need. Easy-to-set up alerts notify practitioners (via email) when the volume around a conversation suddenly increases or other variances are exceeded, or even when a specific blogger joins a conversation.
Cascada Mobile	Social marketing	Cascada Mobile helps wireless carriers and content publishers to overcome their largest obstacle to revenue growth by providing a revolutionary distribution system for their products. Our unique distribution solutions combine the power of word-of-mouth endorsements and the reach of viral marketing, turning your existing customers and subscribers into your biggest promoters.
Cozi	Managing home life	New technologies are working their way into all aspects of our lives. Yet these technologies are typically designed with office workers in mind, and are often disappointing in other contexts. At Cozi, we believe that people want and require a new generation of technology that meets their unique needs in the home.
Cuts	Online video	Cuts is building a new video platform that will empower you to watch your video your way. Cuts.com will not be yet another site to upload and share your home movies. Our goal is to do a really great job of helping you view all the video you paid for and own the way you want to. That's what we're working on.
Dash	Auto navigation	Dash Navigation, Inc. a Silicon Valley start-up, emerged from stealth-mode today. The company is developing a new consumer product and service that will, for the first time, give drivers timely and relevant local information on their dashboards. Backed by venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital, Dash will unveil its first product on Sept. 26 at the DEMOfall conference.
Data Security Systems	Internet authentication and security	DSSS, as a leader in the Authentication Security space, consistently strives to be in the frontier of the technology. Our state-of-art technology serves to provide enterprises and organisations from different arena protection against compromising of security
Eluma	Social marketing	Eluma is the only brandable desktop application that drives customer loyalty and incremental revenue through the power of communities. Eluma enables marketers to create an always-on connection to their users, and to leverage the best aspects of social networking in order to provide users with the ability to collaborate with their most trusted source of information - their peers.
eSnips	Online sharing	We created eSnips while thinking about how YOU would want to share your stuff. We believe that just like us, you have lots of things to share online. And just like us, you probably want to do it all in ONE place, to have the freedom to share ANY type of information, and to have control over what you share and how you share it.
EyeSpot	Video editing and sharing	We set out to build a site which makes it easy to upload, organize and share all that video, photos, and music. Interact with the community, collaborate, and get some great content to work with too.
Flurry	Email on any cell phone	Introducing flurry - free mobile email for everyone. With revolutionary ease of use, you can access your email from your mobile phone anywhere and anytime.
Fonpods	Podcasts on cell phones	The easiest way to join the podcast revolution! Put away your iPod and MP3 player, Fonpods transforms your cellphone into a mobile entertainment and information system. Fonpods is a free, on-demand service that brings podcast listening to any phone. There's nothing to buy and no computer downloads to worry about.
Genius	CRM	SalesGenius lets individual Sales Professionals track how prospects respond to your e-mails. There's no programming or IT help required -- you simply send e-mail, and the Genius Tracker -- alerts you when your e-mail is opened and when your prospects visit the web site.
GrandCentral	Consumer communications	GrandCentral Communications is developing next generation consumer communications applications and services.
Headplay	Unclear	Hard to tell, but here is one thing they say: If you prefer to live in the Headplay world ensure you drink a lot of liquids.
HeyLetsGo	Local events	HeyLetsGo: we now have hundreds of events a day and thousands of people who are up for doing fun things.
iBlocks	Online media re-mixing and sharing	Fully personalized multimedia and game experiences that you can easily share with family and friends. Create your own customized experience using your content or ours. Pull together photos, video, and music from your big party last weekend, or customize a game with music and photos. Then, share your creations with the click of a button. Our goal is to provide you with the easiest way to make a unique statement about yourself and share it with others!.
i-Lighter	Online research	i-Lighter is an exciting new venture that will simplify your online life whether you are researching information, preparing a report for school or work, reading an online article, looking for the best deal on a trip or shopping for a gift.
Imaginestics	Shape search engine	Imaginestics, developer of world’s first online shape search engine, 3D-Seek.com, connects suppliers of manufactured parts or custom services to potential buyers globally using innovative search technology.
JAJAH	Web telephony	JAJAH is dedicated to bringing the world vastly improved telephony solutions at a fraction of the traditional price. Whenever possible, we want to provide basic phone for free - and we truly believe it’s possible. We believe that by bringing together the best of the internet with the best of the traditional telephone industry we will be able to provide our customers with unique new solutions, solutions never before possible, at a price they’ll find irresistible.
Koral	Content management	Smart and easy platform for managing business content.
Lirix	Music advertising	Lirix, Inc. has invented, patented and developed the technology of on-device dynamic ad insertion with recorded or downloaded music. Delivered through the Lirix® Media System, this technology makes ad-supported recorded or downloaded music possible.
Mind Touch	Business servers	With MindTouch Managed Office Server (MOS), you create an environment in which information is up-to-date, free flowing, easily accessible and always available.
Mobile Sphere	Wireless communications	MobileSphere is a leading provider of global wireless communications solutions leveraging the migration from fixed to mobile telephony. Based in Boston, Massachusetts, MobileSphere serves MVNOs, wireless carriers, medium-to-large enterprise, universities, and consumers.
Moixa Energy	Rechargable battery from USB ports	This revolutionary rechargeable battery can charge from any USB port without the need for any recharging devices, cradles or cables. Simply pop the lid to reveal a built in connector and charger, plug into any powered USB port on your desktop, laptop, keyboard or games console, to charge the battery.
Mvox	Speakerphones	vox is at the forefront of enabling hands-free communication, having launched the industry’s smallest Bluetooth/USB dual-mode speakerphone in 2005.
MyPW	Internet authentication	We've developed a system that makes it easy for you to add secure, hardware-based authentication to your website with minimal effort and minimal cost.
NanoLearning	Content remixing	You will be able to incorporate NanoLearning objects into your blog, website, or business process. You can even recombine and aggregate NanoLearning objects into a NanoList.
NComputing	Network computing	Turn 1 computer into the equivalent of 30(up to 10 with Windows XP Home/Pro/Media Center, Windows 2000 Professional) PCs!! No Hard Drive, CPU or CD ROM ; yet each NStation functions as an ordinary computer.
OpenBC	Social networking	The openBC networking platform provides its members with innovative networking and communication technologies for professional and secure contact management on the internet.
PhotoCrank	Mobile entertainment	PhotoCrank, Inc. designs and delivers services for the mobile entertainment market
Pinger	Voice messaging	Pinger is instant voice messaging for your mobile phone. With Pinger you send voice messages directly to someone instantly—no ringing, no greetings, no lengthy prompts. Pinger is fast and efficient like email, but with your voice. It's mobile like text messaging, but with more personality.
PixSense	Photo and video sharing	PixSense takes a holistic approach to managing the entire lifecycle of each digital photograph. Our patent-pending technology bridges the technology barriers between camera phones, carrier networks, and personal computers. The PixSense solution involves native camera phone client software and server-side software that work seamlessly together to give users all the functionality they want, in exactly one click.
Pluggd	Podcast directory and sharing	Discover podcasts based on your interests and the interests of others. Listen to podcasts online, download them to your PC and listen to them, or download them to your MP3 player (e.g. iPod, Creative Zen).
PostPath	Linux email server for enterprise	A Linux-based email and collaboration server that is the only drop-in alternative to Exchange. It provides granular backup and restore, on or offsite redundancy, 5X Exchange performance, and AJAX web access. The result: powerful, easy-to-operate, low-cost infrastructure.
PrefPass	Online authentication	Prefpass offers a service that will ease your pain when it comes to registering on websites.
Presto	Online community for families	We’re developing a unique digital delivery service that will enable families and friends to stay in touch, without the need for a computer or Internet connection. So everyone—even those who don’t have or know how to use a computer—can stay connected.
RealEyes 3D	Mobile applicatoins for camera phones	Realeyes3D has the ambition to become the leading provider of advanced image processing applications for camera phones.
Retrevo	Vertical search engine for electronics	The Ultimate in Consumer Electronics Search
MojoPac	Mobile gaming for USD and iPods	MojoPac allows your USB drive or iPod to become your own personal game cartridge like device. You can install any PC game or application to the USB device using MojoPac and play the game from anywhere.
ScanR	Digital solutions for cameras and phones	Copy and fax with your camera phone or digital camera
Scrapblogs	Online blogging and photo sharing	Like most people, we love to share our photos. Online sharing has improved exponentially in the recent years and even months, but it's time to start having fun with your pictures online. Enter Scrapblog! The only site that merges the creativity and storytelling capabilities of scrapbooking with the publishing and sharing functionality of blogs.
Serebrum	Unclear	Unclear
Simple Star	Online media re-mixing and sharing	Simple Star provides consumer software and services to help people manage and share their memories to PCs and TVs.
SiteKreator	Online web site tools	SiteKreator is the Web's most complete and easy-to-use solution for building and maintaining impressive, Web 2.0-ready business or personal Web sites.
Solid state networks	BitTorrent - based content delivery	The company was formed specifically to exploit opportunities in the commercialization of BitTorrent technology. The Company’s focus is on providing software solutions for content publishers by providing lightweight, portable, high performance core technology based on the BitTorrent protocol (the Solid Core) for use in next generation content delivery systems.
Sports Statz	Sports communities	Real-time statistics and sports community for high-schools and colleges
System One	Online collaboration and research tools	System One unites the best concepts for communicating and collaborating, as they have surfaced independently from each other on the internet, in a business-ready software package for organizing your information- and communication processes. System One actively helps the right people to find each other and to work together more efficiently.
Tao Group	Mobile multimedia	Tao has created 'intent' a seamlessly integrated, high-performance multimedia software platform for embedded, mobile, consumer electronics and automotive solutions.
Teneros	Appliance for corporate email	The Teneros Application Continuity Appliances for Microsoft Exchange enable small-to-medium-sized businesses to deploy a comprehensive, cost-effective continuity solution for mission critical Microsoft Exchange. With a simple 15 minute installation using the web-based interface, the Teneros appliances require no intrusive software installations or configuration changes on the Exchange server.
ThinkFree	Online office	ThinkFree is the leader in next-generation office productivity solutions for platform independent, anytime, anywhere-computing. ThinkFree usability extends beyond PCs and is perfect for Internet-connected devices, including thin client and mobile computing platforms.
Trend micro	Security solutions	Trend Micro is a global leading provider of comprehensive antivirus, Internet content security, and outbreak management software and services. Our products and services are designed to deliver coordinated protection at application and network layers to proactively manage the outbreak lifecycle - from vulnerability prevention to malicious code prevention and elimination.
Tribeca Labs	Imaging solutions	Full spectrum of colors support for digital cameras.
Trigence	Application virtualization	Trigence AE is application virtualization software that turns legacy and production applications into highly moveable, manageable IT assets.
UControl	Home security	Austin-based uControl was born of a desire to move home security beyond the stagnant offerings of traditional systems and into the future, with the hopes of giving consumers something they didn't even know they were missing - true connected security
Violet	Smart objects	Founded in 2002, the vocation of Violet is to develop products and services based on calm and emotional technologies.
VaporStream	Unclear	Unclear
W5 Networks	Wireless retail solutions	W5 develops wireless system optimized for retail industry.
Wallop	Social networking	New approach to social networking and expressing individuality online.
WidgetBox	Widget portal and tools	Widgetbox is on a mission. We want to give everyone the power to assemble, share and integrate everything that's good on the web.
Yoriwa	Unclear	We are building an exciting application that will change the way you work on the Internet.
Zing	Music	ZING lets you discover, play, and collect music wherever you go, whenever you want. ZING gives you the freedom to stay tuned.

Next in our series on international Web markets is Japan. The information for this post was provided by Benjamin Joffe (CEO of Plus Eight Star Ltd) and Masashi Kobayashi (partner of Globis Capital Partners - one of the largest Venture Capital firms in Japan). We start off with an overview of the market, then list the main web companies in Japan. There is some extra commentary after that on why mobile dominates in Japan, the state of online advertising in Japan and its IPO market. There's something for everyone here! Thank you Benjamin and Masashi for the comprehensive and very interesting information about Japan's Web.

Overview

Benjamin: Japan today enjoys not only the fastest but also the cheapest broadband infrastructure in the world, with over 20 million households connected to broadband (out of 46 million). Yahoo! Japan, through its Yahoo! BB service, is among the largest providers with over 5M users. You can get 8M to 50M ADSL for prices between $20 to $45 a month, and 100M fiber optics for a $200 set-up fee and $30 monthly fee. There goes the myth of 'Japan does not have the Internet'!

Masashi: As a result of the aggressive entry by Softbank BB (aka Yahoo! BB), Japan today enjoys a very cheap and very high-speed Internet infrastructure. In addition, on the mobile side there is a very large diffusion of 3G and 3.5G feature-rich handsets and a solid wireless infrastructure. One thing to point out is that even with the growing usage of video-based services like Youtube, or movie content, there is not much stress on the network. In March 2006, more than 2 million Japanese and 5.2% of Internet users used Youtube! (ref).

Benjamin: Japan is 1.5 years ahead of US in mobile? It is difficult to come up with an estimate, but the market maturity goes way beyond simply: "do they have more 3G users?". Here are some data points:

• Over 50% of the 90+ million Japanese mobile phone users have 3G (W-CDMA, CDMA 1x or CDMA EV-DO)
• 85% have a mobile data connection for mobile email and over half of this number use mobile services *regularly*

A lot of people in Japan buy not only digital (music, games, videos) but "real" or "offline" goods on their mobile. They use auction services, blogs and use assisted-GPS powered navigation services to walk the city. And they have been doing so for already 2-3 years, at least. Market maturity is not only about getting a device in people's hand, it is also about the service offering and the actual usage rate. Same for Internet: you can have a great infra with high-speed and no innovation.

Top Web 2.0 companies

Masashi: Unlike Silicon Valley, there are only a few high-quality services in Japan. The main reason for this is that there are only a handful of high-quality entrepreneurs. When magazines publish articles about Web 2.0 in Japan, Mixi, GREE, Hatena and Drecom appear all the time, but there is little mention of anyone else.

MIXI

Benjamin: Japan's largest SNS is named MIXI and has gone last week (Sept 18) onto the Japanese Mothers stock market. Its market cap reached 109 billion yen (US$930m), which makes the IPO the seventh-largest on the Mothers market. Its CEO Kenji Kasahara (30 y.o.) set up Mixi in June 1999 when he was a third-year student at the University of Tokyo. The company initially operated a recruitment advertising Web site and launched a social networking service in February 2004. In the year ended March, Mixi posted a pretax profit of 900 million yen (US$7.5m) on sales of 1.8 billion yen (US$15m). A large part of the revenue comes from advertising. Mixi's membership totaled 5.7 million as of Thursday. About 70 percent are those in their 20s and younger.

Masashi: The company whose development is the most interesting is probably Mixi. Mixi is Japan's leading SNS service. Its number of pageviews is second only to Yahoo! Japan. In September this year, Mixi IPOed and is valued currently at 200 billion JPY ($1.7 billion). With its profits rising rapidly, Mixi has become the flagship of Web 2.0 businesses. There is good information about Mixi here (English PDF).

Blog network 9rules has developed a custom-built search engine for its members' content. I've always admired 9rules' philosophy (note: R/WW used to be a member), because they're all about original content and design. Now they're trying to make it easier for others to discover all that great content, with a search interface that only searches content in the 9rules community. Mike Rundle explains:

"The first year or so of 9rules existence was about grouping great content together, and if I had to categorize the next year I’d say our goal is to now distribute this content in interesting and meaningful ways and 9rules Search is the start of this next big push."

Mike has a full list of the features in his post, but the ones I liked the best are integrated communities ("go directly to the Community associated with that particular entry if you want to read more on that topic") and some nifty Ajax work to integrate Flickr and YouTube. Features I'd like to see in future include RSS feeds for topics (e.g. I may want to subscribe to 9rules members on 'web design') and perhaps the good old tag cloud could be employed.

Custom or social search is a product category that I'm tracking, because it brings the 'social web' element to probably the most important of all Web interfaces: the search box. Eurekster is a great example of an up-and-coming social search company - they believe that niche and DIY search engines are the way of the future. I'll be exploring more of this in the near future. In the meantime check out Ebrahim Ezzy's two-part series here on R/WW in July, Search 2.0 vs Traditional Search (and Part 2). And congrats to 9rules for bringing social search to their community!

3Tera, a company based in California, has announced what it calls a breakthrough technology - "disposable infrastructure". This technology is the foundation of their product AppLogic, which they say is the "first grid operating system that runs and scales existing web applications." It almost takes a Comp Sci PhD from Stanford to read 3Tera's press release, but in a nutshell what AppLogic does is allow Web companies to manage - and scale - all their applications, servers and storage with just a browser. Here's more from the press release:

"The system enables existing software to be packaged into completely self-contained, portable applications that can be easily deployed and scaled to dozens of servers on demand on any AppLogic grid, anywhere in the world. As a result, open source developers, Web 2.0 and SaaS companies can rapidly deploy Web applications without owning and operating hardware infrastructure, and pay only for the resources they actually use."

The term for this is 'utility computing', aka 'on-demand computing'. It means that a service provider makes available computer resources to their clients and charges them for the usage rather than the hardware. Kind of like a public utility such as your electricity company. Read/WriteWeb contributer Alex Iskold called this 'Compute Services' in his recent Web Platform Primer post.

Scaling Web apps

This extract from 3Tera's About page gives some background on the problems of scaling:

"Successful online services have millions of users. Serving that many users means scaling the application to hundreds and often thousands of servers. But scaling online applications is an enormously difficult problem. It took companies like Google, Yahoo, eBay and Amazon 10 years to learn how to do this well. This knowledge is among their most closely guarded secrets. It is not by accident thatGoogle has more patents on load balancing than on search.

3Tera has solved this problem. Our product, AppLogic, is the first grid operating system that runs and scales existing real-world web applications on grids of commodity servers. The breakthrough technology that enables this is called disposable infrastructure."

Dispose of your servers

So what do they mean by 'disposable infrastructure'? In the press release Vlad Miloushev, president & CEO, notes:

"3Tera is working with hosting providers to offer reliable self-serve utility computing services that make Web applications easy to deploy, manage and scale. In the next decade, only the largest enterprises will be able to justify owning and operating their own servers."
(emphasis mine)

Interesting comment that in the near future only "the largest enterprises" will own and operate their own servers. I imagine in the future specialist companies like 3Tera, along with the big Internet companies like Google, Microsoft and Amazon, will operate 'server farms' that become too cost efficient for other companies not to utilize.

3Tera - a company to watch

3Tera strikes me as a company to keep an eye on - they're tackling a complex problem and they have a lot of potential customers out there. Look at all the 'web 2.0' startups that have popped up over the past year or so - most of them have big dreams of scaling up to hundreds of thousands, or millions, of users. 3Tera could be just the solution they turn to.

Written by Alex Iskold and edited by Richard MacManus.

The social bookmarking market is in a steady state with two dominant players - del.icio.us and StumbleUpon. The rest of the pack, including Yahoo MyWeb, appears to be substantially behind. Will they catch up? In this post we attempt to answer that question.

We also take a look at how social bookmarking has evolved since del.icio.us. (even del.icio.us itself has evolved a lot!). We compare the features and approaches of the different companies, to see which has gained popularity and what has become the norm in this space.

A short history of social bookmarking

The current social web era started with del.icio.us and the advent of social bookmarking. The simple concept of a tag has turned our interactions with the web upside down. The idea of being able to store your bookmarks online, share them with everyone and see what others have bookmarked - triggered the sequence of events that resulted in today's rich and social web ecosystem.

We used the e-consultant and go2web20 lists of social bookmarking services to select the companies. Note that we did not include any company with an Alexa rank of less than 100,000. We also did not profile social news sites (like digg) or social shopping sites (like Kaboodle), as they will be profiled in separate R/WW posts.

Feature comparison

Note: Mouse over the column headings to see full text

Site	Imp	Pop Rec	Rel Dir	Frd	Rat	Pri	Tag sug	RSS	Wid	Brw	API	Pros	Cons
BlinkList Alexa: 3,600 Technorati: 63,794	x	x	x	x	x	x	x	x	x	x		BlinkSpaces - create a community out of your links, nice browser toolbar, all and all really nice.	A few broken links in places, a bit underdesigned for my taste.
Blogmarks Alexa: 9,000 Technorati: 48,331	x	x		x		x						Nicely designed, generate a post of your bookmarks for your blog	Seems incomplete compare to other sites. Injects ads. Crashed several times during my tests.
del.icio.us Alexa: 155 Technorati: 1,597,818	x	x	x	x		x	x	x	x	x	x	Easy to use, intelligent, tons of useful features, not in your face	Not fancy, might not appeal to the main stream.
Site	Imp	Pop Rec	Rel Dir	Frd	Rat	Pri	Tag sug	RSS	Wid	Brw	API	Pros	Cons
diigo Alexa: 13,750 Technorati: 2,262	x	x	x			x	x	x	x	x		Post to other bookmarking services, supports annotations with sticky notes, flexible blog integration.	A lot of options, might not be easy to learn for everyone, mixes a lot of things together.
Furl Alexa: 2,400 Technorati: 126,000	x	x	x	x	x	x		x	x	x		Has archiving, simple browser add-on, has some additional options associated with the post.	Lacks related items, could use a re-design.
Ma.gnolia Alexa: 9.400 Technorati: 82,800	x	x		x	x	x	x	x	x		x	Beautiful design, nice implementation of groups, well thought through	Does not look very active, lack of browser add-ons and imports, lacks unique features.
MyWeb Alexa: 1 (for Yahoo!) Technorati: 76,000	x	x		x		x	x	x	x	x	x	Nice look and feel, could work for main stream.	Too many things in the toolbar, falls short of del.icio.us on many features.
Site	Imp	Pop Rec	Rel Dir	Frd	Rat	Pri	Tag sug	RSS	Wid	Brw	API	Pros	Cons
Shadows Alexa: 13,000 Technorati: 11,140	x	x		x	x	x		x	x	x	x	Fairly comprehensive set of features, clean design	Popular is done by tags instead of by links, site is somewhat slow, does not feel as connected as del.icio.us
Simpy Alexa: 14,600 Technorati: 35,000	x	x	x	x		x	x		x	x	x	Instantly view current page history, browser export	Could use UI improvements, no popular links, similar links are not cross users, too many first level menues in Firefox extension
StumbleUpon Alexa: 617 Technorati: 33,500		x		x	x				x	x		A different approach, that seems to be successful, given the number of users. Nice browser toolbar.	Would be great to have directory and browse related.

Estimating the number of users

Companies typically do not reveal the number of users and activity, but we can do educated estimates. In a recent post on TechCrunch, Michael Arrington stated that there are about 53 million posts on del.icio.us. Based on the statistics mentioned at the time of the del.icio.us acquisition (by Yahoo) in December 2005, and the growth since then, we estimate the current number of people using del.icio.us at 500,000 [UPDATE since this post was first published, del.icio.us announced they have 1,000,000 users]. From this we conclude that the average user on del.icio.us did a little over 100 posts. This is a pretty impressive number, although it might be the case that there is a fat tail and a handful of users with a huge number of posts.

If we use 100 posts per user as a guide then, we can do similar estimates for other social bookmarking companies. For example, since Blogmarks has a total of 514,205 posts, we estimate that they have roughly 5,000 users.

Here is another interesting angle... a search on Yahoo MyWeb for items tagged "food" results in 7,200 bookmarks. A similar search on BlinkList brings up 120 pages with 20 items per page - or 2.400 bookmarks. In other words, the number of posts tagged with a particular word or term can be used as another relative measure of the number of users.

Finally, here is another method for estimating the number of users. We took a recently popular web2.0 list url: go2web20.net, as well as all time favorite CNN.com, and looked at how many people have bookmarked these on various services. If we do this for a hundred or so randomly choosen URLs, we would get more precise estimates - but this is just to give us an approximation of the number of users. Here is a table showing our results:

NB: With MyWeb, the estimated users is 114,600. As it turns out we can't compute it with the same method, because information is not quite there. Instead, we used the Tag Comparison method and compared it with BlinkList.

Conclusion

The social bookmarking market is dominated by del.icio.us and StumbleUpon. These leaders split the market, as they bring orthogonal approaches to bookmarking - del.icio.us builds a hierarchy for people to browse (it does related relationships, etc.), while StumbleUpon is more of a random discovery system.

Meanwhile the other players in this market have a lot of ground to make up on the two leaders, based on our analysis in this post.

Update: Added Furl - thanks to Barry Dahl for pointing it out (comment #3).

Update 20/9/06: More updates to the tables and figures above, based on comments.

Update 5/10/06: Updated del.icio.us figure in the main text.

Next in our series on international Web markets is France. Other countries profiled so far have been Germany, Holland, Poland, Korea, United Kingdom, Russia, Spain, China, Turkey, Italy and Brazil. France has the 9th highest number of Internet users in the world, with 26.8 million. It has an Internet penetration of 44%, putting it below countries like the US, UK and Germany (all of which are over 60%). But France is similar to its neighbors Italy and Spain, which are both in the 40-50% range for Internet penetration. Perhaps more significant is the number of French language speakers on the Web, which is estimated to be 4.4% of all Internet users - or 45.8 Million. However that's only an estimated 12% of all French speakers, so there is plenty of room for growth there.

My thanks to Thomas Ezan and Jean-Pierre Christie for the information in this post. Both kindly sent me details about the French Web market and its most popular apps.

Overview of French Market

When I think of France and the Web, I think of Netvibes (the Personalized Start Page used by 5 million people according to recent reports), Kelkoo (the price comparison engine sold to yahoo), and Jeff Clavier (not a web app, but a French angel investor!). But obviously there is much more to the French Web, so I asked Thomas to tell me more...

R/WW: Do most people use French web apps/sites instead of the US ones?

Thomas: Not really, except for news websites. For example newspaper websites like LeMonde, Liberation and LeFigaro. There are also many internet and IT-focused websites like 01net. All of those sites are in french. The typical french person is not used to reading or talking in english, unlike in Germany, Netherlands and the nordic countries. There is also french version of Techcrunch.

R/WW: Do the big companies have French language versions of their products? (Google, Yahoo, Microsoft etc)

Thomas: Google is the number 1 website in France and the other big companies like msn, yahoo are also very well used in France. For example their email services are well used. They all have a french version (which they must do to target the french market). MSN Messenger is the number 1 IM service (AIM is not very well used here). The french versions of amazon and eBay are also very famous here.

R/WW: What are the biggest Web companies in France?

Thomas: I'm not sure, but meetic is number 1 as far as turnover is concerned (it's a dating site). And it's started to spread around Europe. There is also priceminister and 2xmoinscher, were people can sells second-hand stuffs (it's a kind of eBay without the auction concept). 

The biggest e-shops are Cdiscount.com and Rueducommerce, were you can find anything (buying on the internet is now common in france, even for my mother!). Lastminute.com is the number 1 travel site. There is also kelkoo, a "price comparer" created by Pierre Chappaz and sold to Yahoo for millions.

Thomas' Top Web Apps

Zlio: a kind of Loomia or MyPickList, which goes further in enabling you to create your own shop online (here is mine). Thus it's a "smart clone", by cloning and then innovating further...  isn't it innovation ? ;-) [Richard: yes, definitely!]

Google's Carl Sjogreen gave a talk at the Future of Web Apps conference about how they built Google Calendar. Rakesh Agrawal took extensive notes, as did Tim Bonnemann.

What I love about Google is they consistently think 'Web Native' when developing web applications. My favorite example of that is Gmail, which changed the whole paradigm of web email. And that's nothing against the new Yahoo Mail Beta, which has a desktop UI and is a very fine app too. But when you build a browser-based app, then why not optimize the design for the Web and introduce new UI paradigms that weren't possible in the desktop era? That may be the early adopter in me speaking, but the innovation you do now will be the norm in the long-term.

Carl Sjogreen said that the Google Calendar team focused "on what the web can do that paper can't" - e.g. collaboration and access anywhere.

On that note, on ZDNet today I wrote about what we can expect in a Web Office. In a nutshell, expect something completely different from Microsoft Office:

...it's important to remember that with new technology comes new functionality. A term I use for this is 'Web native', meaning that the next generation of office software will not necessarily be the same as the past PC-based generation (typified by Microsoft Office). The new generation will have Web native functionality - including, but not limited to, collaboration. Rod Boothby likes to say that blogs and wikis are the first major 'office 2.0' apps, but I think a web-based suite will be so much more than publishing and collaboration features.

One new feature that I think will be common place is 'mashups', whereby data is sourced and combined from a variety of internal and external sources. Imagine an online spreadsheet for a marketing report where you gather data from all over the Web and across internal business units too. 

There will be other Web native functionality too, things that we can't yet predict.

I referenced Zimbra, DabbleDB, Morfik, Zoho and ThinkFree as some companies that are building Web Native office applications. If, as Nick Carr suggested recently, office suites will be fully web-based by the early 2010s - then I'm betting that Web Native functionality will underpin this evolution.

Original link via Greg Linden

Interesting NY Times profile of Baidu, China's main search engine and currently the 4th biggest website in the world. It has a market value of $3 billion, but "some analysts" question whether Baidu can keep out competition from Google and Yahoo:

"While Baidu continues to gain market share in China — and does so with a Web site that the Chinese government heavily censors and that gives priority to advertising rather than relevant search results — some analysts question whether Baidu can withstand competition from Google and Yahoo, which possess superior technology and global work forces."

I actually think the question is the wrong way round - it should be: can Google and Yahoo withstand competition from Baidu, in China?

While I'm not able to judge whether Baidu's technology is inferior to Google and Yahoo's - although I'd love some comments on this from techies who are familiar with Baidu - I think Western companies (even Google) will be hard-pressed to compete against Baidu in China. In our Top Web Apps in China post, we noted that government regulations, language and cultural barriers are all difficult for western companies to overcome. While there continues to be a lot of hype about China being the next big market for Silicon Valley companies to conquer, the reality may be completely different.

Does US have a lock on innovation?

And who's to say Google's technology is better? Netanel Jacobsson is one person who should know - he runs the up and coming browser Maxthon from China. In a recent post Netanel commented on whether America still has a lock on innovation. In short he doesn't think so and indeed had this to say:

"China should not be seen as a copy cat - but a great force on future innovation. Between 2004-05 there was an increase in close to 40 % in filed patents from China."

Baidu gaining market share, while Google struggles

Source: Sina

Also, regarding Baidu in particular, China Web2.0 Review noted recently that Baidu gained market share last year and strengthened its leadership in China’s search market. Meanwhile Google China lost a significant amount of market share:

"According to CNNIC report, 62.1% users choose Baidu as their preferred search engine, representing an increase of 10 percentage in one year, while Google China’s market share decreased 8 percentage to 25.3%. In Mr. Lv’s research, Baidu gained 13% market share in last year, almost two third users use Baidu as their first choice, during the same period, Google China lost about 12% shares."

Why the market share slump for Google in China? According to Tangos Chan, who is the publisher of China Web 2.0 review, "Google China did not think locally."

This theme that localization matters has come through very strongly in our series of posts on international web markets. Perhaps it even matters more than the technology.

In case your RSS Reader got the better of you over the working week, here's a snapshot of last week's Read/WriteWeb posts. The big web tech stories were Times Reader, Zune, Yahoo Mail Beta, iTV. Here are summaries of all our posts this week:

New York Times Reader Launches - NY Times releases the beta of its new desktop app, promising a better Web reading experience. Built with Microsoft WPF technology.

Netvibes Claims 5 Million Users - despite Netvibe's 5M user base (is that return users?), we're still a way off start pages being mainstream tools.

Zune - Social Networking Differentiates It From iPod - while the new Microsoft iPod-like device will offer social music sharing via WiFi, questions remain over its DRM.

Yahoo! Mail Beta Release - Exclusive Podcast With Ethan Diamond - Yahoo opens up the beta for its Ajax-powered web email, which has desktop-like user experience and great features such as calendar and RSS Reader integration.

Apple's iPod Success Won't Be Repeated With iTV - 30 people commented on this, most of them making good cases for Apple succeeding with iTV.

The Web VC Chart - Alex Iskold's well-researched and beautifully designed chart of Web VC investments. Keep the comments coming in, because we're going to do an update real soon on the chart.

Poll: Do Personalized Start Pages have a viable future? - 52% say yes, 46% no and 2% don't know what start pages are.

VCs on Web Technology: Judy Gibbons from Accel - this is well worth a read if you're a budding entrepreneur in the Web space. Judy has 25 years experience in the computer industry, so her advice should be noted.

What New Web Technology Has Apple Unveiled? - a wrap of Apple's announcements this week, including movies on iTunes and an as-yet unreleased device (currently named iTV) that will enable you to view video content on your television.

Sharpcast's Desktop/Web Synchronization - Soon For All Types Of Files - this is what Next Generation Web Technology is all about; solving a big pain point (synching files/data between PC, mobile and other devices) and making it all seem easy.

Smartpox: Bar Codes For The Web - Read/WriteWeb was the first publication to cover the oddly named Smartpox, which offers barcoding technology to connect the online and offline worlds.

Top Web Apps in Brazil - continuing our very popular series on international Web markets, we discovered that Brazil Internet users are very community-minded and social. And yes, a lot of them use Orkut.

World Internet Penetration Now 16% - Asia Growing Fast! - China and Asia in general are making great progress in Internet penetration. Despite the US and countries such as my own being above 65% penetration, much of the world is closer to 10-15% or lower.