GenuineVC David Beisel's Perspective on Digital Change

July 12, 2005

Usually, I post well thought-out viewpoints, but today I’m going to express three ideas that I’ve just been mulling over in my head.

The first originated from Nivi’s post in which he conjectures “RSS is the TCP/IP packet of Web 2.0.” He goes on to say,

“You can think of RSS like a TCP/IP packet. A source publishes an RSS feed and the feed worms its way through the Internet to get to you. Things get more interesting when the feed is routed through a bunch of services before it gets to you. The feed can go through services that[:] Insert contextual ads; Strip out boring categories; Splice in other feeds from flickr, del.icio.us, or from other bloggers (see Superblog); Manage the feed (see FeedBurner); Translate RSS to email; Splice in contact and calendar info (see RSSContact and RSSCalendar). When you route a feed through a slew of services, RSS becomes a protocol for Machine to Machine (M2M) communication.”

Hmm… this is a very interesting analogy. Or is it more than an analogy? Is RSS truly the “fundamental building block” for the “Internet Operating System”? I like the idea of the Internet Operating System (IOS) – what does this notion mean and what are the ramifications if you approach thinking about it in this way?

The second idea is one I’ve raised previously. Could we solve the problem of repeatedly registering for and setting up our online social networks with a meta-system that crosses all platforms? It could store extensive commodity connection information (i.e. who is connected to who), facilitating innovation in the services realm without the necessity of gaining critical mass to express value. If there was an open and central repository system for social connection data, social networking companies would be able to tap into the already wealth of information about a person. Steve Shu says that he could see this construct “for Web 3.0, but it may be tougher for Web 2.0 timeframes.” He is probably right, but is it really that forward thinking or pie-in-the-sky? Is there a way to approach this goal incrementally to avoid the huge collective action problem that industry standards require? Could a commercial endeavor march in this direction, or does it require a commercial-agnostic entity? Or perhaps I am wrong – maybe acquiring a community of users provides a required positional advantage for social networking companies which is integral to competitive success.

Finally, I’ve been thinking about the “sell-side advertising” concept that John Battelle originally wrote about and that Fred Wilson & Dave Morgan further promote. Battelle summarizes,

“Instead of advertisers buying either PPC networks or specific publishers/sites, they simply release their ads to the net, perhaps on specified servers where they can easily be found, or on their own sites, and/or through seed buys on one or two exemplar sites. These ads are tagged with information supplied by the advertiser, for example, who they are attempting to reach, what kind of environments they want to be in (and environments they expressly forbid, like porn sites or affiliate sites), and how much money they are willing to spend on the ad.

Once the ads are let loose, here’s the cool catch – ANYONE who sees those ads can cut and paste them, just like a link, into their own sites (providing their sites conform to the guidelines the ad explicates in its tags). The ads track their own progress, and through feeds they “talk” to their “owner” – the advertiser (or their agent/agency). These feeds report back on who has pasted the ad into what sites, how many clicks that publisher has delivered, and how much juice is left in the ad’s bank account. The ad propagates until it runs out of money, then it… disappears! If the ad is working, the advertiser can fill up the tank with more money and let it ride.”

What does this concept really mean and how could it emerge? Is a company called Zoundry, which allows users to easily drop affiliate product-links directly into their blogs, the next step in this direction after “traditional” affiliate programs? Could we truly ever have sell-side advertising, as advertisers surely want to retain some control over how their products are marketed and sold? Sell-side advertising sounds great in theory, but like a social-network meta-system, I wonder what are the best next tangible incremental steps which would translate an idea into action?

Again, these are my open thoughts and questions; just wondering aloud as I wrap my head around these theoretical and conceptual ideas.

  • http://poductivity.blogspot.com/ David Gibbons

    IMO – I’m sorry to say that I think Fred just blogged about this … http://avc.blogs.com/a_vc/2005/07/vc_cliche_of_th_1.html

    I’ve long thought amazon are spoilt rotten not paying for customer review content. The problem with Zoundry is that it starts to spread the content too thin – and even busy blogs are going to see really “piddly” revenues from this because buying traffic will be so extremely thinly spread.

    A more profitable model may be to build a single site where consumers can go for quality (moderated) product reviews. Then pay each reviewer a % of revenue generated. Let readers rank reviews (was this helpful? etc.) and then prorate earnings based on review popularity.

    You’ll soon generate enough critical mass for the site to have broad appeal to many customers (i.e. ad revenue). This model is “organic” and self-propelling – not reliant on the collective successes of zillions of micro-sites – which you no longer need to keep track of.

    I dont think the “reviews_mall.com” has been built yet but for a very succesful analogy, check out istockphoto (www.istockphoto.com) – they get 7,000 photo (aka review) submissions a month – and look to be printing ca$h to me. Imagine istock had merely produced software that allowed each of their thousands of photographers sell their own photo’s off their blogs – ha ha ha – luckily istock weren’t that clever. Yes, istock sells images not products – but at $1 an image, an amazon associate would only have to be selling $20 (or more) products to match the revenue & payments model.

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    Cool design focused event @bladebos Nov 6. Limited seats available! http://t.co/qHjU4WBeTx
  • Lee Hower
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    @vcparty that statement is true. FRC's LP base looks pretty similar to Sequoia's though
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    @vcparty agree. some LPs have to bend their model, though best LPs don't care much about concentration - they focus on accessing best funds
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    @vcparty thx - would slightly disagree trad'l LPs & smaller funds are misfit… best seed funds have trad'l LP base (albeit concentrated)
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    .@andypalmer shares solid thoughts on mission, values, & social accountability for millennials in the workplace: http://t.co/wsAz5Gj7K6

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