2. Cuil

3. Hakia

4. Worio

5. Ubiquity

Ubiquity for Firefox from Aza Raskin on Vimeo.

6. Semanti

If you've got more examples of semantic data collection tools, list them in the comments below.

Did our browser just get smarter?

In the past, Ubiquity worked by letting you enter in specialized commands called "verbs" into its interface which is launched by hitting "Ctrl + Space" on your keyboard (or "Option + Space" if you're on Mac). These verbs let you update, interact, and access various web services from Wikipedia to Twitter to YouTube and so much more. Some verbs are built into the extension, while other custom verbs can be added on as you choose. (For a big list of custom Ubiquity verbs, check out this post.)

Using Ubiquity gives you a geeky high as you type in commands like "twitter [message]" or "g [Search term]" to update your Twitter status or perform a Google search, respectively. However, interacting with the browser in this way probably appeals more to techies who probably still prefer the command line over that new-fangled GUI interface and have every keyboard shortcut memorized. It's harder to imagine mainstream users (yep, those same ones who don't even know what a browser is) using a UI such as this.

But with the recent update, that may change.

It's Not About Knowing Everything, It's About Knowing Where to Look

As people, we know we don't have all the answers, but that never holds us back. We launch Google, enter our question, and parse through the results provided until we find what we need. But ask an application to do something that it hasn't been programmed to understand, and it will just give you a blank look. (OK, probably an error message, but you get the idea).

That's why what Ubiquity is doing is so interesting. It can now accept and process input, even if it doesn't know the word. Maybe it's not really "thinking" as the title of this post implies - it's not all of a sudden an A.I. engine or anything - but it has just made a giant leap.

For example, explains Jono DiCarlo on behalf of the Ubiquity team, the software can now make network calls to help it figure out what you meant when you entered a word. "You can now type 'pasta' into Ubquity," he says. "Before, it wouldn't have known what to do with this input. But now, by making network calls to web services, it recognizes 'pasta' as a type of restaurant, and suggests the Yelp command to find pasta places near you."

It also appears that if you weren't looking for the restaurant called "pasta," you could use the other suggestions provided to perform the action you wanted instead. Maybe you wanted to "translate pasta," or read about pasta on Wikipedia...those links are only clicks away, although they didn't appear in the immediate results.

If Ubiquity can now accept any word into its interface, this expands the possibilities for use far beyond that of the geekified tech set because it means that, in theory, you would never have to memorize any of those commands at all. You could simply use the suggestions feature. Of course, a lot of this depends on how well Ubiquity can actually figure out what you meant based on the responses returned from the web services it queries. We'll obviously need to extensively test this feature before we can really determine that. Still, the potential is there.

Other Updates: Standardized Commands & More Languages

Assuming you do want to learn the commands, though, you'll be glad to know that they've now standardized those verbs to make them easier to learn. There are no more commands with hyphens, like the ugly "add-to-calendar," for example.

For non-English speakers, the new language options will be a plus. In Ubiquity 0.5, commands will come localized in Danish, English, and Japanese. Other languages will be added in the future, but if you can't wait, the introduction of a new parser localization tool will help you teach Ubiquity your language.

A Better Browser?

The innovations being delivered by Ubiquity are enough for this blogger to keep Firefox around - at least for now. Despite having made a nearly 100% switch to Google's Chrome (it's the speed!), news like this has me contemplating a switch back. Yet my Firefox install is currently weighed down with a number of can't-live-without-em (until I did, in Chrome) extensions that seem to slow it down. Perhaps it's time for a fresh install with only the one extension: Ubiquity. Because really, the way it's shaping up, it may be the only one you need. 

Ubiquity 0.5 can be downloaded directly from here.

Oliver Reichenstein and Aza Raskin, head of user experience at Mozilla, have been thinking about the future of tabs in Firefox, and some of the resulting mockups are quite intriguing.

Reichenstein argues that tabs were a good solution for an earlier age of the Internet, when users hardly ever had more than ten tabs open at any given time. Now, however, as browsers are slowly turning into operating systems, a new paradigm for organizing this information has become necessary.

The current generation of browsers does a decent job when it comes to keeping a current browser session organized, but Reichenstein wants to create a system that structures the browser more like a mutimedia file system. He proposes a new interface that looks more like iTunes than today's Firefox, with folders, libraries, and bookmarks in a sidebar.

Try Tree Tabs

If you would like to get a glimpse of what tabs on the side look like, have a look at Tree Tabs, a nifty addon that puts tabs on the side and that features a huge number of options for customizing the experience.

If you are on a netbook, for example, where vertical space is very limited, Tree Tabs (maybe in combination with Tiny Menu) will allow you to reclaim some of your screen estate.

Coming Soon: Built-In Ubiquity

Mozilla is also moving ahead with the integration of Ubiquity, a command-line style interface for common browser tasks, into Firefox's 'awesome bar.' Mozilla plans to add this project, dubbed Taskfox, into the main Firefox interface by the time version 3.6 of Firefox is released.

You can find an interactive demo here, or have a look at the mockups on this page.

Besides being able to quickly send a link to Twitter, one feature we really like is feedly's integration with Open Calais, Thomson Reuter's semantic web service. Feedly's Calais command overlays semantic metadata on the current page and then links to a page on feedly with related stories from your RSS subscriptions, Delicious, YouTube, and Twitter.

Commands

Feedly's developer Edwin Khodabkchian notes that he will add more commands soon. Here are all the feedly commands that are currently availably in Ubiquity:

Encouraged Commentary currently offers three compelling features:

First, highlighting any section of a post avails a "respond" button that allows users to immediately comment. Clicking respond grabs the highlighted text and adds it - in blockquote - to the content of the comment, simply and easily referencing the exact passage that the user is discussing.

Second, working with comments, themselves, offers additional functionality. Highlighting and clicking respond within a comment automatically establishes the familiar "@user" addressing to make the intended recipient aware of the conversation directed at him/her. The highlighted text, again, is brought into the comment for reference.

Third, the connections among comments are tracked. Mousing over any commenter's name reveals a list of his or her other comments in the thread. Clicking on list items allows users to "jump between related comments and responses quickly" - something that threaded conversations have been working to capture. Reply and Quote buttons allow the user to jump into the conversation without highlighting.

Granted, the young project is not without its rough spots. Users are reporting issues with IE (shocking, I realize). And some of the implementation of the concepts could use refinement. No doubt that will come as more people engage in the project.

But those issues are easily overlooked. Because what is most compelling about this approach is the natural conversational dynamic that Jeffers has captured. You do what seems natural: highlight and respond. And you do so with context. That dynamic provides both Encouraged Commentary with content and the "hooks" to track the history of the conversation without adversely impacting the user. What's more, it provides a series of reference points that encourages new users to enter the discussion - and to do so just as easily as the conversation began.

If we see widespread adoption of this sort of thinking, it's quite possible that we may see the conversation returning to comments.

To see Encouraged Commentary in action or to try it yourself, visit Don't Trust This Guy, Jeffers' blog. To download the source code, visit the Encouraged Commentary project on GitHub.

The new UI adds a more elegant way of displaying results and the ability to edit the UI, but the main difference between this version and the last update is that the plugin is now indeed noticeably faster.

When Mozilla first launched Ubiquity, we gave it a rave review, and it has quickly become one of our favorite Firefox plugins. Our own Sarah Perez called it a "whole new UI for Firefox."

A Command Line for Firefox

If you are not familiar with Ubiquity, the addon gives you the ability to quickly type commands into Firefox. You can, for example, update your Twitter status by invoking the command line by pressing 'ctrl-space" (or 'option-space' if you are on a Mac) and then type 'twitter [message].' Or you can search Google by simply typing 'g [search term].' Search results are updated live inside the Ubiquity UI. For a complete list of commands, just type 'command-list' after installing the extension.

If you want to try out Ubiquity, also have a look at the list of installable Ubiquity verbs we compiled earlier this year.

Ubiquity for Firefox from Aza Raskin on Vimeo.

Ubiquity already comes with built in search commands for Youtube, Amazon, and Flickr. Here are our top picks for searching media sites using custom Ubiquity verbs:

• Last.FM - Allows users to search the Last.FM music network for artists pages.
• Seeq - Search Seeqpod for music.
• Vimeo - Allows users to search Vimeo for matching video results.
• Stickam - Watch the livestream of your Stickam friends no matter what page you're on.
• Netflix Search - Search Netflix for movies.

Social Networks

So far Ubiquity only allows you to interact with one social network: Twitter. With these custom verbs you'll be able interact with more popular social networks.

• Ping. FM - Update your default Ping.FM status.
• Jaiku - Update your Jaiku status.
• Identica - Update your identi.ca status
• Facebook - Update your Facebook status or locate a friend.
• FriendFeed - Post a link or comment to your FriendFeed stream.
• Twitter and Link Shortner - Extends Ubiquity's default Twitter functionality to include a link shortening command.
• Myspace Person Search - Search for someone on Myspace.

Social Sharing and Bookmarking Sites

Outside of Digg, there are no other ways to share news and links with friends. So for those of you on Reddit, Delicious, and other related sites, we have just the verbs for you!

• StumbleUpon - Stumble the current page you're viewing. Requires StumbleUpon extension.
• Sphinn - Submit an article to Sphinn.
• Reddit - Submit a link to Reddit
• Twine - Post an article to Twine.
• Delicious - Bookmark an article with tags to your delicious account.
• Share On - Share a link on any of the following sites: Facebook, Reddit, Digg, Delicious, Slashdot, or Fark.
• Most Popular on Delicious - Get a quick overview of the current 10 most popular delicious bookmarks.
• Google Bookmark - Add the current page you're viewing to your Google Bookmarks.
• Instapaper - Save a page for later to your Instapaper account.
• Soup.io - Bookmark a page to your Soup.io account.
• Tumblr - Share a ton of link love to your Tumblelog.
• Check Slashdot - Get a quick overview of either three of the latest articles on Slashdot or any number of articles that you specify.

Notable Verbs

While searching for the best Ubiquity verbs we came across a ton that were great, but couldn't be categorized. Without further ado here are other notable verbs:

• Subscribe via Google Reader
• Multiple URL Shortners (TinyURL, isgd, Bitly, Hurl)
• EveryStock Photo Search
• Find Movie Times Near You
• W3C Validator
• Torrent Search
• 30 Boxes
• Remember The Milk

And The Verbs Keep Coming

We're sure you'll be able to find a ton of new Ubiquity verbs to subscribe to. What we'd like to know is what verbs you're already using and what verbs you hope to see in the near future. To start the list, we're already using quite a few of the built in verbs and most of the social media custom verbs listed here. In the future we'd like to see verbs for Diigo, sharing items via Google Reader, and more video related verbs. Let's hear what's on your list.

- 83% watch video clips, up from 62% in the last study in June 2007
- 78% read blogs, up from 66%
- 57% of internet users are now members of a social network
- RSS consumption is growing rapidly up from 15% to 39%
- Podcasts are now mainstream digital content, listened to by 48%

Social networks have been "a key driver for the growth of social media":

- 22% of social network users have installed a widget or applications
- 55% have shared photos
- 22% have shared their videos
- 31% have started a blog
- The world’s biggest social network is MySpace with 32% weekly reach followed by Facebook on 23%

The report also states that social media is a global phenomenon:

- Top markets for blogging – China 70% of internet users write a blog, Philippines 66% and Mexico 60%
- Top markets for social networking – Philippines 83%, Hungary 76% and Poland 76%
- China is the world's largest blogging market with 42m bloggers versus 26m in the US

Those last stats will be an eye opener for many, because the US web tech market gets most of the attention of the blogosphere and mainstream media. But with China having 42m bloggers compared to the US's 26m, there is large scope for social media to flourish there - even despite China's political issues with social media.

CreateDebate is the newest debate site to hit the web. It moved from private beta to public late this morning and offers an extremely slick interface for online debate. Debates on CreateDebate can take multiple forms. They can be open ended questions, such as "Who had the best NFL draft?" or they can be head-to-head debates, such as "Is drug abuse a criminal or health problem, Yes or No?"

Users can vote in two-sided debates and add arguments in each. Arguments are voted up or down Reddit-style with the top arguments displayed at the top of the page. Users can also add rebuttals to arguments which can be further voted upon. Debates that are time sensitive (such as "Who will win the Democratic nomination for president?") can be set to expire. CreateDebate can also be used for simple yes/no polling on non-contentious issues.

One unique feature of CreateDebate is that each debate has a "research" page that pulls in news from RSS or Atom feeds. Whoever creates the debate can add new sources to the research page and news stories can be automatically made into the focal point of a new debate.

Riled Up! is a more simple debate site that uses the head-to-head format. Debaters are asked simple yes or no, or X vs. Y questions and asked to support a side. Choose wisely, because once you've picked your side, you can't go back.

Similar to CreateDebate, users vote arguments up and down and can post rebuttals, which can be tagged as supporting, neutral, or opposing.

Wis.dm is really a question and answer site that many have compared to Yahoo! Answers, but because it favors yes/no questions, it is actually more akin to the debate sites here. Wis.dm is set up very simply : Someone asks a yes/no question, users vote, and people debate the answer in an unthreaded discussion forum below the question.

The free form nature of the actual debate makes it a bit harder to follow everyone's position than on more polished debate sites, but Wis.dm is easily the most used of the sites in the round up. Its simplicity makes it very approachable and probably contributes to its mainstream appeal.

outQuib is a social network focused on debate and discussion that we reviewed in January. Debates on the site take the form of a poll with multiple response and forum-style commenting. But the focus of outQuib is really the social aspect -- debates are used as a means of connecting like minded people who can form groups on the site.

Jyte is a product of JanRain, makers of MyOpenID, and I get the idea that it is really more of a proving ground for their OpenID products than it is a serious startup. Jyte allows people to make claims (like, "Tiger Woods is the best pro golfer of all time.") and then people can vote to agree or disagree.

Users can also add comments to the debate (arguments for or against) and give each other "cred" points in areas they think a particular user is especially credible -- though it appears that cred points don't really amount for much other than bragging rights.

Conclusion

With the US presidential election kicking into high gear over the summer and coming to a conclusion next fall (barring any repeat of what happened in 2000), debate sites can probably expect to see a bump in traffic as people head online in search of places to argue their opinions. Which of the sites above is your favorite? Did we miss any? Let us know in the comments below.

It's a small but interesting site and the basic premise here is something that could be expanded beyond restaurants alone, something the company says it intends to do. I like it a lot.

BooRah uses affiliate services to display menus, make reservations and offer big discounts for restaurants in a long list of cities. These added features are a very nice touch, especially the menu display from AllMenus.com.

Semantic Analysis

The reviews that get processed are identified by semantic analysis identifying food blogs among 100,000 blogs being indexed. That number could be bigger, but it's unclear what percentage of those indexed blogs are in fact food blogs.

Inside the review excerpts you'll find food terms, like a particular dish, identified and linked out to a search results page displaying that same item in the same location you're currently looking at. That's really nice, so if I'm reading a review that says some place's dolmas are alright but aren't the best in town - I'm one click on the word dolmas away from finding out where in town is said to have better ones. Yelp lets you search for terms in a city of course, but making it one click automatically is nice.

I wrote a review this morning and the parsing is a little funky. The key term in my review is "raw," which should be discernible since the culinary category is "organic." Instead, BooRah pulls out a link to "cooked stuff" for searching. That's the opposite of what a user would want in this, admittedly niche case. Food, like many other niche topics, needs strong long-tail analysis - doesn't it? Maybe it's unrealistic to expect semantic analysis to be strong in outlying, long-tail use cases - perhaps full text search ala Google is going to serve said user better. I hope not, though.

Yelp doesn't do a lot of what BooRah does. The final bit of semantics I found on the site was a "semantic cloud" for selected cities. That gives you a good idea what kinds of foods and issues people are talking the most about for a given location and lets you click through to read those reviews.

Further Differentiation

The site searches for reviews across a lot of different sources, depending on the location. Yelp is not included, which is a real shame, but sites like CitySearch, Yahoo Travel, Tripadvisor and many more are included. In some locations the local newspaper website is included in review sources. You can easily filter between sources or chose to just look at food review blogs.

Reviews can also be written on the BooRah site itself. When you sign up for an account you're prompted to select between 3 different charities, presumably ad revenue you generate will be shared with those charities. That's a nice touch. I don't see Yelp doing that, do you?

RSS feeds for new reviews of restaurants in a particular city? I'll subscribe to that! I'd like to have some more granular control of such a feed: new reviews, new restaurants or new restaurants with 3 or more reviews. Yelp has pretty limited RSS feeds.

Finally, the Boos and the Rah's are probably the biggest differentiator here. It is hard for systems like this to recognize things like sarcasm or other peculiarities of human communication - but BooRah seems to be doing a fairly good job in the little bit that I looked around it. I really like the way it pulls out emotive quotes from reviews. My initial skepticism has subsided, but I'll be keeping a close eye on this feature as I use the site more.

Seeing positive and negative reviews around three different parts of a restaurant (food, service and ambience) really is far better than just seeing a number of stars. This method of displaying reviews scales for the individual user, far better than stars and full text reviews do.

The Down Sides

BooRah has been around for a little while but it still feels like its database could be better fleshed out. The user experience is very good, but (for example) the slideshow viewer is broken right now. I don't know about on the iPhone, but on Windows Mobile the site is effectively unusable for me. That's a real shame, as Yelp Mobile is fantastic.

Not including Yelp in the reviews being indexed seems like a pretty big downside. Maybe most of the world doesn't need to read the musings of the yuppie restaurant-philanderer 2.0 crowd, but as one of those myself - I like Yelp reviews. At the same time, it is nice to read what the rest of the world has to say too. In fact, I'm going to try using BooRah instead of Yelp for awhile - when I'm at home on my laptop at least.

Shortcomings aside, combination of semantic indexing and natural language sentiment-processing is a very interesting one. I look forward to BooRah getting better and bringing the same strategy and feature-richness to other niche topics.

Disclosure: I have a consulting relationship with a somewhat related, still-unlaunched, service provider.

YackTrack is a conversation tracker, automating the search for the comments that many content producers currently have to seek out on their own. After searching for a similar service that does this and not finding one, Rob decided to build his own.

Using YackTrack is simple - just enter in the URL whose comments you want to see and and click "Search for URL." YackTrack scours the net to find comments from services like Digg, Disqus, FriendFeed, Mixx, StumbleUpon, Technorati, and WordPress. Each supported service has its own separate section so you can follow the conversation that takes place on that site.

YackTrack's Web Site

There are still many things people wish that YackTrack could do, but Rob says those are coming. Specifically, his future plans include registration and saving URLs to track, RSS and email notifications, more supported services, and, based on initial user feedback, maybe a WordPress plugin as well. He also hints at something even bigger, saying "My future plans are fairly straightforward, except for one part that I would prefer not to talk about yet."

Despite these big plans, Rob seems humbled and surprised by the attention the service is receiving, especially considering the service only launched yesterday. He's worried that his server, never tested to withstand a huge traffic influx, won't be able to handle the load we send. (RWW has been known to crash startups' servers before). "This is not a large beast like FriendFeed or Twitter," he says. Maybe not yet, Rob, but I'd buy some extra servers and bandwidth just in case.

However, the signs are that Japanese Twitter usage is set to explode in popularity - Twitterlocal shows that Tokyo is currently by far the city with the most Twitter usage.

Twitter itself hasn't released any stats, but Google Trends is another to show a large Japanese presence on the service, both in location...

...and in language:

And in many ways this trend is logical, given Japan's history with succinct writing - from haiku to text messaging. As the AFP recently noted, "the Japanese are among the world's most avid users of cellphones, which they use to pay for train fares, shop, watch television, read novels and, of course, to send messages to one another."

Could Japan be the first country where Twitter usage becomes mainstream, rather than just being popular among geeks - as it is in the US and english speaking countries? Judging by these early stats, that's a good bet!

image: TrendsSpotting

Nobody knows what name will eventually resonate with people. Web 3.0 sounds too derivative of Web 2.0. By the time this new phase gets a name, people won’t want to be associated with the past.

Web 2.0 emerged after a technology crash, plus a mini consumer recession, and solved the big problem in the Dot Com era which was the cost of audience acquisition. Do you remember how nutty Dot Com was? We would raise gazillions of VC cash in order to advertise in traditional media at high rates in order to get people to our site, so that we could sell advertising at low rates. On top of that we paid people to produce content. How could we have been that dumb?

Web 2.0 solved that cost problem, by getting users to create content and then promote the service to other people. We called that user generated content and viral marketing, and felt a bit smug. We had totally and completely solved the cost of eyeball acquisition. We even called it social media, so that people did not think we were in the grubby business of making money.

So what is wrong with the Web 2.0 picture? When the dust settles, on what issue will we be saying “how could we have been that dumb?”

This could be a long and deep recession

The dust may take a long time to settle. This is not a technology crash, it is a consumer recession created by excess debt, but it is likely to be longer and deeper than the last recession. 9 million Americans have negative equity, mortgages costing more than the value of the home. Total debt in America is $53 trillion, “that’s $175,154 per man, woman and child, or $700,616 per family of 4, $33,781 more debt than last year”. This may take some time to work through the system and it is likely to impact people’s behavior for a some time after that. That is a lot of people who will be acting more cautiously, spending less.

This matters to us, because Web 2.0 bet on the consumer. Selling to enterprises was way out of favor. The investor view was that selling to enterprises was not scalable, suffered from long and uncertain sales cycles, customers had too much clout and it was full of big firms in a market that was consolidating. All of that was true. So we all bet big on the consumer.

This is not our bubble. Technology/media is not at the epicenter this time, but the shock-waves will impact us all and in fundamental ways. Consumer media depends on advertising and advertising gets cut in a recession. Advertising $$$ will rush to what really works, deserting the marginal propositions. This is likely to be really ugly for a lot of print media, but online advertising will not escape unharmed. From this recession will emerge new models and new winners, just like Google and search advertising emerged from the last one. There will also be a re-assessment of the business models that currently drive Web 2.0.

The phase transition trilogy

This 3 part post will try to identify the early shape of the emerging new era and what entrepreneurs can do to position to be winners when the cycle turns positive again.

Part 1, this post, answers the question, what is the fundamental problem with Web 2.0 that will have us saying in a few years “how could we have been so dumb?”

Part 2, tomorrow, describes opportunities around the Main Street Web, when all the Web 2.0 services have gone mainstream and are applied to the way millions of people make a living.

Part 3, the final post, describes “Dancing with Gorillas“, the opportunities for entrepreneurs in a world dominated by a few big companies such as Google, Microsoft, Yahoo, eBay and Amazon.

The Web 2.0 problem is not on the cost side, it is on the revenue side

It has become fashionable to say “build a great service and the revenue will follow” and to deride people who ask about monetization as hopelessly unable to “get it”. Well yes, if you can flip it to somebody else before the music stops, that is a smart model. A few people made tons of money doing that. But investors in the public companies that acquire these services do eventually ask questions such us “how much money does Google make from YouTube or Yahoo from Delicious?

Public market investors are asking questions. Subsidies from massive cash cows obscure the problems with new services for a while. Microsoft could fund many cash burners for a long time and so can Google. But companies with slightly weaker cash cows get hammered. Investors do ask Yahoo how they are monetizing their acquisitions and eBay came under the spotlight for not making enough money from Skype.

This is not about “free is bad”. Free to air, supported by advertising, has been the media business model since radio and TV. That is a valid business model decision on who pays. It is “free to everybody with no revenue model at all” that is a problem. Or free with a weak revenue model. These are end-of-cycle warning signs.

Twitter will be the interesting case study. They have phenomenal traction at probably minimal cost. They have top class VC, so no worries on that score, they can last as long as needed. They are almost certainly not even thinking about getting to cash flow positive as, at least publicly, they are not even thinking about revenue. So an exit is pretty likely and the acquiring company will be thinking about revenue - because their investors are thinking about revenue!

4 problems with get big first, monetize later

Twitter, YouTube, Delicious and other ” get big first, monetize later” services face four fundamental problems:

1. The standard revenue models are hard to apply once a service has got a lot of traction. There is push-back from people who have grown used to the service without ads. Advertising that is not useful, that is simply an interruption, will alienate users. Yes, we have spoiled users with a “free and no ads” value proposition.
2. Innovative services may need an innovative revenue model, so that the advertising is useful and is not viewed as simply an irritation. But innovating on both fronts is hard. The big budgets are allocated conservatively based on proven models, standard ratios and lots of competing sites to choose from. Cost Per Click and search was a “made in heaven” combination, since the advertising could actually be useful to searchers and advertisers were incentivized to make their ads useful. Since then what ad model innovation has moved beyond experimental to deliver $100m plus revenue lines? Online advertising is still fundamentally either CPM or CPC, with a bit of unfashionable but possibly highly effective Affiliate Marketing.
3. Subscriptions are tougher to sell to consumers in a recession (even if we want to sell subscriptions even more in a recession). This is even harder when your competitors, who have drunk deep of the “don’t worry about monetization Kool Aid”, are giving the same thing away. Hard, but very rewarding for those that succeed. When the give-it-away crowd run out of money, the subscription business may return to favor. However to sell subscriptions you need one of two propositions. Either you can say “our monthly subscription saves you money” (e.g. Sales Force vs Siebel) but that is usually a business proposition, less often relevant for consumer services. Or you can make your service addictively fun in a market without a free alternative, which fits some game/entertainment models.
4. The supply and demand problem. Yes we are spending more time online. So ad $$$ will flow from traditional media to online media. The gap between time spent online (20%) versus ad $$$ spent online (5%) is still “big enough to drive a truck through”. But the supply of content, created by users or programs at virtually no cost, is increasing way, way faster than online attention time. So the total ad $$$ is continuing to increase, but it is being spread a lot thinner. Particularly when you subtract Google’s revenue from the total.

The lack of new models is not for lack of trying. Many sound very exciting and some of them even sound plausible. But what is missing is the solid, proven revenue model with at least 4 quarters of great growth that enables a company to IPO to “won’t get fooled again” public market investors. Google had that solid revenue growth when they went public. Since then, what web venture has had an IPO in America? Sarbanes Oxley provide a great excuse, but excuse is all it is. Companies with real and growing revenues have had successful IPO exits, but these have not been Web 2.0 companies

When the dust settles, when the cycle turns again and we emerge from this recession (or downturn or crash or bubble burst or whatever else you want to call it) people will say Web 2.0 was a blast, we built some amazing services and lots of people made money from M&A but how could we have been so stupid as to miss:

1. We bet everything on selling to consumers who were betting everything on treating their house like an ATM on the basis that property prices would rise forever. Oops.
2. We never invented a model that effectively translated social media activity into revenue. Without that it was just an expensive playground. Double oops.

Image: aturkus

Part 2: The Emerging Main Street Web; Part 3: Dancing With Gorillas: The New Web Era