Apple, Adobe, Web Analytics and Megalomania

April 15th, 2010

What is it about social media and web analytics which turns CEOs into control freak megalomaniacs anyway?

Last week, it was Apple’s revision of the SDK agreement with developers barring all cross-compilers from use for developing apps heading for the Apple AppStore and which was first pointed out by John Gruber in this post. Most outsiders see this as targeting Adobe’s Flash platform, and it is rumored that Adobe is now contemplating going legal over the issue.

Last September, Adobe purchased web analytics firm Omniture. This was one of the deals where most peoples’ jaws dropped because Adobe’s flagship product is Creative Suite, which is a suite of applications for publishers and creative types.

Omniture’s products are used by business development types, who want to know where visitors are coming from, what sites/search engines refer them, etc. All of this is achieved through the use of tags embedded in each page’s source code. Whenever a request is made to a page, the tag calls a server and logging in that it has been called, including information about the user’s browser, geographic region, etc. With this data, the bizdev types then tell the designers and creatives how to further improve the content and pages, making everybody rich in the process.

Anyhow, that’s the idea.

What made the Omniture acquisition interesting was that in most company organizations, the bizdev and design/creative types don’t work that closely together, let alone use the same production tools. What Adobe proposed through the Omniture purchase was to bring both groups together in its new CS5 product lineup.

But two days before Adobe launches CS5, Apple releases its new guidelines for app development on the iPhone platform, which is aimed at cross compilers, but hits designers using Flash especially hard. For the record, I don’t like Flash myself, it hurts performance, fires up the fan, and is a general nuisance. As far as I’m concerned, real developers use C or a C-derivative language, not Flash.

But banning it!!!??? I believe that apps developed on Flash will probably sell less well in the AppStore, and that the smart Flash developers will say “Hmm, maybe I should start developing using Objective-C and Cocoa frameworks so that I can squeeze that last bit of performance out of OpenGL, etc.” Isn’t wholesale banning a bit much? Why not just let the market deal with the issue?

Now Apple has come out with a new zinger for the new iAd network: developers are not allowed to collect user analytics inside their own applications, while Apple is allowed to insert ads into applications. What does this mean if you are a developer?

  • Apple may insert other ads, even your competitor’s ads into your app, and there’s nothing you can do about it.
  • You cannot collect download and usage data so that you can improve sales of future versions of your app, but Apple can, and they will not share that data with you.

So if you are a smart app developer, what do you do? I’d say that you’d have to put on a business hat, and ask yourself:

  • Do I want broad coverage of a new app to test the waters and see if this app sticks? If so, sell on the App Store.
  • Is my app more narrowly targeted, and has more functionality? Then build a web version of it, and optimize it for the iPhone, iPad and Android platforms.

The most important idea behind the platform concept is that it needs to be fair to all players. The AppStore started great, but now it’s showing wear and tear. And that wear and tear is coming from business decisions by Steve Jobs.

Basically, Apple is showing that it wants to be the ultimate ad planner and ad buyer for mobile digital. But good ad planners and buyers don’t compete with their customers. That’s the most basic rule.

Through this action, Steve Jobs is going not only after Adobe’s Flash platform, but it’s Omniture web analytics acquisition too.

Steve, I thought you were a Buddhist? How about taking up golf and getting in touch with your softer side?

Event on 11/5/08: About IAB In China (Beijing)

November 3rd, 2008

For the past five months, I have been researching about the feasibility of setting up an IAB (Interactive Advertising Bureau) in China. The IAB as a trade association was founded in the US in 1997, and has since spread to all major markets in North America and Europe where it helps to coordinate discussion and implementation of Internet advertising production standards and measurement standards for web analytics.

I have been invited as a guest of Web Analytics Wednesday to speak on the subject on Nov. 5 in Beijing. I plan to talk about what I have learned from talking to many digital companies and ad agencies, and about the progress which has been made so far. I also plan to include my own assessment of what is needed to make IAB successful in China.

If you are interested in this subject and have the time, I look forward to meeting you at the event.

UPDATE For those of you who are having trouble getting to the above link, it will be at 8PM Wednesday at Club Camp. You can get directions to Club Camp here.

How Much Can Chinese Bloggers Make From Blogging?

March 26th, 2008

manxcat.jpeg

For most people, blogs are no longer exciting as they were in 2002, when they first burst on the scene. Part of the reason for this is because although the technology for blogging is mature, an economic model for bloggers has not really taken hold. This is especially the case in China, where there are a huge number of bloggers and the Internet has become hugely popular, but the economic rationale has not yet appeared. Several years ago, there was a lot of talk and conjecture about a long tail, and idea which Chris Anderson made popular with his book, The Long Tail.

Unfortunately in China, the long tail looks like a Manx cat. (The Manx is a variety of cat which is born tailless.)

Recently there has been much discussion in the US about the value of ad networks. The economic rationale for ad networks is simple: they buy unsold inventory and place ads in them so that no ads go unsold. Better to place ads anywhere than to have them wasted, right?

Not so fast, says Jason Calacanis. Quoting from ESPN’s recent tough statement banishing ad networks, he says that “the use of ad nets diminishes the value of their (clients’) brand and content by spreading it so widely, ultimately threatening existing relationships with advertisers”.

In his article, Calacanis argues that for that medium-sized publishers, they should take on the costs and responsibility of their own ad sales networks to sell their own inventory, instead of outsourcing to an outside ad network. He argues that a real publisher is in control of three things:

  • Your writers
  • Your readers
  • Your advertisers

Moreover, he puts numbers behind his definition of a mid-sized publisher. If you have more than $250,000 in ad sales, you should hire your own dedicated sales person.

His advice is that if you are a mid-sized publisher:

  1. Hire three ad sales people
  2. Spend 50% of your time going to ad meetings and conferences
  3. Kick out your ad networks and use something simple like Google Adsense to take up your backfill

Another article about how Gawker Media pays their writers left me even more interested in how these numbers would translate for China. Gawker writers are not paid a salary, but simply get an “advance” against pageviews. Basically they have to hit their pageview numbers if they are going to do well. Moreover, these numbers are public.

This raises a really interesting question: How would these US numbers for pageviews and traffic volume translate to make sense in China? And could it be that blog ad networks in China have held down bloggers’ salaries by providing low quality untargeted traffic, and the only way to turn the situation around is to have publishers build their own ad sales teams in-house instead of relying on outsiders to sell their ad inventory so that they can pay their writers a working wage?

I suspect that the answer is “yes”, because only a publisher has the best sense and feel for their own content and audience. Ironically, it could well be that ad sales for medium-sized networks are something which cannot be sold best over the Internet.

Now, that would be a change, wouldn’t it?

A Quick Look at 2008 and China

January 1st, 2008

Is there any way at all that 2008 will not be the year of the Chinese Olympics, and by extension, China? Will we be stuck between the rise of China narrative and the sourness to the point of completely puckering up of the US media and to a lesser extent European media re China?

I say yes.

The coverage of China by the major media has been completely unsatisfactory; it has not been informative and has instead driven their own editorial agenda. That old editorial agenda no longer works because it does not reflect the ground reality of China. It does make sense though to take a closer look at China’s development outside of just the tier one cities. Let’s hope that this begins to happen.

In the big picture though, the Chinese Olympics are not the biggest story. There are so many interesting things and opportunities happening on the Internet. I’m surprised that so many people miss them, such as the fall of Facebook even though their numbers continue to increase, and the failure of social networks to monetize their traffic because they have chosen to side with advertisers against their own user base.

Facebook is like a rocket which continues to coast upwards even though its engine has cut off; momentum is carrying it upward. But eventually gravity will win…

We are in the early stages of growth for the Internet, I believe that increasingly new Internet startups will be founded by business people, not technology people. On the PC platform, the technology is mature; it is the business models which aren’t working. Now, the smart technology people are switching their focus to the mobile Internet.

For smart business people who want to disrupt the current business models, 2008 will be a banner year. For more predictions, take a close look at the predictions of Mark Anderson and Fred Wilson. Part of the reason new and viable business models have grown relatively slowly on the Internet is because the business side has been driven by technology people who don’t understand business and how to make deals, and the business people have been thinking too much in terms of the large corporate businesses which are now being disrupted by the Internet.

It is time for a new breed of entrepreneurs who understand technology, and are not behoven to traditional businesses. In China, this has already happened in gaming with Timothy Chen Tianqiao of Shanda and Shi Yuzhu of Giant Interactive. Ironically, it has not happened as quickly in the west.

It’s time to expand the base.

On the web application side, it is getting easier and easier to develop robust applications. Twitter, a very successful social application was developed with Ruby on Rails, a full stack web application framework which was released by 37 Signals, a Chicago-based design firm.

The significance of this is that web applications can now be designed by designers who are more focused on user experience than software engineers who are focused on features (many of which are of dubious value). One thing I have noticed among many Ruby on Rails deployments: narrower focus. Instead of trying to do everything, these applications focus on doing a few tasks very well. Good examples are the online project management tools put out by 37 Signals and which I use to manage my business.

Wouldn’t it be great if these web applications were made available to a Chinese audience?

As for myself, I’m sharing my feeds on Google Reader. You can find them through Google Talk and Gmail by contacting me. You can reach me at paul dot denlinger [at] gmail dot com.

I’d like to see yours too; let’s start sharing in 2008!

The Big Hole in Chinese Productivity Apps

November 4th, 2007

When I look at web apps and ideas in China today, practically everything I see has to do with the retail consumer. Popular fields are gaming, because it proven and China has a large gaming population, not to mention the success of the major players including Shanda and The9, and music and search.

The result has been a plethora of startups in these fields. After all, they have a demonstrated and successful business model based on advertising. God knows that there are huge amounts of advertising dollars just looking for half-decent excuses to be spent in China. VCs can use these as references in their decision-making and in valuation, which is good.

But the real money is always made when a new company breaks out in a field which was considered dead or dying. Right now, I think that field in China is web productivity apps.

There is a big hole between Office (Word, Excel, Powerpoint) and the web. In the US and Europe, this area is occupied by Oracle, SAP and Salesforce. There are Chinese competitors such as Yongyou and Kingdee. Google has made some significant headway with Google Docs, but there is still a long ways to go.

So far though, none of them have passed my Internet cafe test. This means that I have not seen anyone sitting on a computer in an Internet cafe using any of their apps. They are all playing games or chatting away.

This creates a chicken and egg situation; VCs fund companies which get the eyeballs, and hold back on those productivity apps which do not get the attention, but are far more meaningful and productive. And the companies which are making productivity apps, which take far longer to develop and mature, have trouble getting funding. The investment cycle gets shorter and shorter, but it takes longer to develop meaningful apps. As a result, the productivity apps market gets starved.

Something has got to change, and I hope that it isn’t too far away… Sometime soon, people will have to start earning money to play those games.