Commentaries

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Google’s real-time challenge

In its latest venture round last week, Twitter was valued at $1 billion. The Wall Street Journal calculated that $2.7 billion would be a fair value. Robert Scoble, an influential tech blogger — and habitual enthusiast – reckoned somewhere between $5 billion and $10 billion was justified. That’s for a company with no revenues and no known business model.

Has the world gone crazy again? Is Twitter just the latest manifestation of a new bubble of froth and hype?  Perhaps. But the excitement does point to an arena where investors’ exuberance is justified: the growth of the real-time web.

The real-time web has the potential to build significant businesses in a few areas. Take search.

Google is wondrous, and most of us are understandably reliant on the search results we get from it. But Google lets its users down badly when they try to find out what’s happening now. The epiphany for many came last January when US Air pilot Chesley “Sully” Sullenberger successfully landed his plane in the Hudson River, with no serious injuries. News of the event flowed rapidly through tweets from eyewitnesses. Cable news quickly caught up, but if you wanted to be a web voyeur, Twitter was the place to look. It happened again with the protests following the Iranian election. Twitter became the primary outlet for (unverified) news from the streets.

Cashing in on the data you create

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– Eric Auchard is a Reuters columnist. The opinions expressed are his own. – 

By Eric Auchard

Eric_Auchard_columnist_shot_2009_June_5x7_589x824.jpgSAN FRANCISCO, Sept 17 (Reuters) – You created it. They make money off it.
  
That’s the business strategy of popular Web sites, led by Facebook, which is just beginning to tap the value of its 300 million members, triple its base a year ago.
  
The paradox of so-called “user-generated content” is that big companies such as Facebook and Twitter look to grow rich on information users share with one another.
  
But some users are beginning to grow savvy to — and protective of — the value of the data they share about themselves. This has prompted Web players to make democratic noises about users owning their own information.
  
The companies face a dilemma: they must find ways to sell advertising to support the cost of hosting their customers’ creative content without scaring off the users who make it all possible.
  
Facebook photosLast week, Twitter, the Web-based short-messaging phenomenon, revised its terms of service to reassure members that they retain the rights to any messages they post on the site. The key change Twitter made is that now it has laid the groundwork to sell relevant advertising based on users’  messages, known as “tweets.” 
  
Such moves are putting the legal conditions in place to offer targeted advertising based on user behaviors and intentions as they can be deduced from the content they create or watch. Individual activities can be used by advertisers to identify potential audiences, which in aggregate, are served up specific marketing advertising.
  
But it’s hard to see how existing forms of online advertising can be crammed alongside the rapid fire bursts of 140-character messages that Twitter users produce. Advertising experts say the company’s best hope lies in making corporate marketers pay to deliver marketing messages over Twitter. Some recent rule changes seem designed to enable such ads. 
   
Facebook got into hot water with its members earlier this year for adding two sentences to its terms of service that asserted ownership of messages, photos and other user content.

from The Great Debate:

Can sleeping giant Skype reinvent itself?

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eric_auchard_thumbnail2.jpg -- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

Do once-hot Internet start-ups who miss a date with destiny ever truly get a second chance? History says no, even for once-great names like Netscape, AOL and MySpace.

Skype hopes to be the exception. On Tuesday, a group led by top Internet financiers in Silicon Valley and Europe agreed to pay eBay $1.9 billion in cash for a 65 percent stake in the one-time web calling sensation.

Twitter backlash foretold

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Technology market research firm Gartner Inc has published the 2009 “Hype Cycle for Emerging Technologies,” its effort to chart out what’s hot or not at the cutting edge of hi-tech jargon. It’s just one of an annual phalanx of reports that handicap some 1,650 technologies or trends in 79 different categories for how likely the terms are to make it into mainstream corporate parlance.

Jackie Fenn, the report’s lead analyst and author of the 2008 book “Mastering the Hype Cycle,” delivers the main verdict:

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