The Year That Will Be: What to Watch for
As quickly as it came, it has passed, and now it begins again. One year has ended and another has started off in a hurry, so fast that we almost have to stop saying “Happy New Year” in our emails. If the end of the year provides reflection, the beginning of the year gives us an opportunity to dust off the crystal ball and think about some of the things we might see, experience, and/or that impact the year ahead. Regardless of how well we predict the future – generally poorly – this year should prove incredibly memorable. While no one seems to think the US economy is truly alive and kicking, fewer seem to think the market will take another nose dive, like it did in 2009 and part of 2010. And, while the economy didn’t add jobs, that didn’t stop Apple from overtaking Microsoft as the most valuable technology company or Facebook’s valuatation more than tripling or a whole host of other companies having record years and no shortage of exits.
In no particular order, here are the things on the mind for 2011:
Real-time – We still don’t know what it means, but it’s starting to make more sense. We’re seeing with real-time, what we are seeing with many on this list, and that is, they don’t really make sense in a bubble. Twitter didn’t invent real-time, but it popularized the concept and gave the rest of us an opportunity to visualize one aspect of real-time. Additionally, along with Facebook’s social widgets, Twitter gave us a glimpse at a web experience that includes Google but doesn’t start with a search. Twitter and the applications built on top of it have done something we didn’t expect, re-orienting our view of data and the web. Lots of data is real-time, but now, real-time starts to mean more than just a scrolling stream / feed and the occasional breaking story found on Twitter first.
Motion detection – Three years ago, I kicked my video gaming habit. It probably had something to do with a significant other, and while playing the Wii at friends’ houses was fun and novel, we are simply in awe of Microsoft Kinect. One cynic wrote that it offers nothing new and that motion capture has been around for a long time. How else could they make ultra-realistic sports games? With Kinect, though, we don’t wear the little tracking balls, and even more importantly, this technology costs less than a night of drinks. And, if you’ve seen some of the things, read hacks, that people are already doing with Kinect, you have glimpsed a piece of the future. We won’t talk about what the adult industry has already devised.
Facebook – Whether the company likes it or not, something significant will probably happen. Rumors are already swirling that they will be forced to IPO, and Goldman Sachs, in a matter of weeks, said they had private individuals lined up and ready to commit several billion dollars at a $50 billion valuation. Some have predicted that Facebook will not stay in the news or be as meaningful, but we couldn’t disagree more. Among other things, this is the year where we expect to see a revamp in how it handles pages for business and its third party ad network.
Blackberry – Two of our friends switched away from the Blackberry after countless years on the platform. What’s impressive about them is that they are early adopters. When the iPhone came out, they bought one to try. They know ways to use the web that we only wish we knew, and yet, they stuck with Blackberry…until now. It’s a small sample size, but to us, it tells us something about mobile and how Blackberry is not positioned to capture it. If they were close to competitive, these two would have stayed. They love BBM as much as we do.
Yahoo / AOL – There was a brief rumor about a merger of the two and the formation of a private company. Going private looks like a good call for Bankrate who, since going private has made two major acquisitions and, when it goes public again, will dwarf its old self. It’s hard to see a similar scenario here, but either way, each one will have to do something significant this year. Having enormous amounts of traffic can only last so long. They are two of a, perhaps, dying breed. Heavy on content but light in the areas that have taken off – social, mobile, and local. Microsoft could be on this list, but assuming they let the Xbox team take over most of the company, we could see an Xbox experience that helps the company become relevant in the next round of innovation.
Sharing – As old as the web, sharing and other emotions (as Disqus calls them), started to show their monetization potential. We all knew about getting people to forward emails and complete multi-step forms from the web to do so, but this year, we learned that we could be a participant without having to have another participant in-mind. Among the two most powerful – like and retweet. You know both are going mainstream, or at least Twitter and Facebook, when you overhear an urban high schooler quip to another, “No I tried looking it up. Retweet is only for twitter messages. You can’t do anything really with Facebook status.” The other replied saying, “I hate people who treat Facebook statuses like Twitter… writing non-stop. Don’t they know that’s only for Twitter?”
Economy – Call us pessimists, but it’s hard to feel better about an economy that recovers without adding jobs. Then again, our feeling that way might just be a case of thinking of the world as black or white. As mentioned above, the fears of a double-dip seem no longer on the forefront of discussion, and the stock market posted it’s second straight yearly gain. Yet, we can’t help wonder, if this is better, what exactly is better? There are plenty of companies that are doing well, but it feels as though we have entered a period of transaction for the American economy and people, one that sees many signs of success but not a scenario of rising tides lifting all boats.
Mobile / Apps – If memory serves correctly, Facebook opened up its platform in 2007 with the first apps coming not that much later. In the three and half (!!!) brisk years since, apps have become more than hugs and farms. They have transformed the development landscape for all types of programs and platforms. Their existence has shown us a new way to navigate; challenging both search as we know it and the domain name driven web. This year, we will see the unveiling of an Apple app store for desktop applications. We cannot imagine how they will change desktop computing. We’re just excited to get some of the apps for the iPad for those of us who have yet to get one. A desktop app store is such a big shift, because it’s technology from traditionally less powerful devices influencing the historically “better” devices.
Tracking – One of the many legal challenges thrown at the internet advertising space last year included Congress thinking about regulation surrounding tracking. As we wrote, it’s amazing what people will share, much more than a company can track, but the latter is vilified for no other reason than it is hard to understand and yet visible in our lives. Most seem to expect that even with a change in control in the House of Representatives, some legislation will look to get passed, even if it doesn’t actually get passed. There is also the expectation of a do not track list, and here Microsoft, notoriously hands-off, has decided to lead the way by allowing users to opt-out of tracking in its next browser release. The big winner will be mobile. It has advantages the web does not, and it’s still so new that it has several years before becoming some congressman’s pet project.
Touchscreen – Thinking about technologies that are three-plus years old now, the touchscreen, or more importantly, navigating sans mouse / trackball has reached that point. Sitting next to me is an iPhone from more than two years ago, and in an age of seeming technological obsolescence every 12 months, it’s amazing just how modern that device remains. It still operates more fluidly than its competitors, and it has re-oriented how we look at all of computing. The iPhone and now iPad are some of sleekest applications, and it continues to amaze us how much it has changed human behavior. We look for additional surprises, and as a result, revelations, to happen by the end of this year. Just as modern day cars have digital speedometers, will we see computers (non-iPads) without real keyboards?
Own Your Own List – In the online advertising world, we might change up the lyrics from “Are you down with OPP,” to, “Are you down OPE?” The “e” standing for email. Historically, the list owner hasn’t earned the lion’s share, the one doing the monetization has. Last year showed us once again that email can still be king. The biggest difference? We saw companies building their own lists and monetizing them through their own deals. Just as the Useful proved in all of the early 2000’s, that you could buy banners and monetize through primarily email, that’s what the latest breed of performance-based marketers are doing. Almost all of the hottest new names rely on email to monetize, but good luck getting them to hand over that list to others.
Future of Commerce – The trend towards arbitraging media to monetize to email is all part of what has become the future of commerce. From Gilt to Groupon, the way people shop has changed. The way deals are run has changed. And, the way that brands interact with consumers has changed. The changes are happening across industries, from local restaurants to dentists, and they span all types of buyers. This year, we will most likely see some major exits for at least one flash commerce site and a daily deal site. Expect that sooner than later.
Social Performance Based Marketing – See, that’s what was missing all along from our space. We just needed to attach a buzzword to the front. Sounds so much better and more promising, right? In all seriousness, one of the newer and more interesting things we have seen are companies who make money in the performance marketing space leveraging the social graph to do so. The term is slightly hackneyed already, but it’s another testament to the power of Facebook Connect and their ownership of both the universal login / id and your social connections. Zoosk, which operates in dating, does so well, that they can afford to purchase TV. It’s really genius and applies beyond dating.
E-commerce As A Service – Thank Montgomery’s James Min for that term and our VC friends James Cham and Jason Stoffer for enlightening us on what is jokingly referred to as Book of the Month Club 2.0. These are e-commerce companies that don’t sell specific items. Instead they are like Netflix, except for all the things you wouldn’t have guessed – jewelry, shoes, clothes, and more. Even better, from the performance marketing standpoint, is that the vast majority will be in need of performance marketing DNA. These companies might offer a new approach to subscription, but they are still subscription businesses with a customer acquisition funnel to fill.
Geo-tagging – High up on the list of when one plus one makes ten, we have this notion of geo-tagging. We, as users, are more than familiar with uploading pictures and sharing them. We do it all the time, especially from our phones, but all it takes is a little tweak, and all of a sudden a new and significant trend is born. Geo-tagging has been around since 2009, but thanks to a new breed of apps and the maturation of sharing platforms, its usage and more importantly the data it produces are becoming significant. Just like the app that encourages people to take pictures of their food and share, the company that sits at the hub of this data will have its choice of monetization options.
Secondary Markets – They didn’t seem like such a transformative player on the outset, but with an investigation by the SEC, their time under the radar has ended. When it was just a few employees wanting to sell, it wasn’t that controversial, but now, these secondary markets have become the means by which employees, funds, and other stock holders see liquidity before a typical exit event. They are being called the new IPO, and we will be hearing much more about them in the future.
Checking-in – On the phone, checking-in acts similar to a like, except it’s more temporary in nature. You’re at a place but won’t stay there for long. Smart entrepreneurs have realized it works for the web too. In yet another, let’s slightly tweak one concept and apply it to another, we have the notion of checking-in to sites. Here too game mechanics are at play, and just as we see with the offline version, we will see online. Checking-in will not only create a more engaging experience for the user, it will also help site owners. From an ad standpoint, check-ins become one more tool in the targeting arsenal with check- in partners being the hub for future deals (if a retailer site) or re- targeting.
