2011-09-26 Facebook unleashes updates while Google+ goes public
 

Intelligence Report - 09/26/2011
By Mark Glaser & Desiree Everts

NEWS

RESEARCH

News

Facebook unleashes updates while Google+ goes public

Google+ seems to have gotten Facebook's attention. Facebook has been busy over the past few months, and is now evolving in ways it never has before. "The last five years of social networking have been about getting people signed up, and getting people connected with their lives," Mark Zuckerberg explained at f8. "The next five years are going to be defined by the apps and depth of engagement." The company announced a slew of updates to its site at the f8 conference, including Timeline, a redesign of people's profile pages to help share life stories with friends. Plus, it unleashed a new class of social apps under its Open Graph so users can see and hear the music or movies their friends like. The company also announced partnerships with news publishers, including Yahoo News, the Washington Post, Gizmodo and the Guardian, which have built apps so that their content can be read within the social networking site. Other recent updates include new privacy settings, a redesigned news feed, and smarter lists of friends.

Many believe the transformation of the platform, which was a long time coming, was accelerated by Google's entry into the social-networking space. "Do I think most of these changes would have happened if Google+ never arrived on the scene? Sure," wrote ZDNet's Emil Protalinski. "I also strongly believe Facebook would have taken much longer to roll out new products, kill existing features, and would have taken a lot fewer risks." Just two days before Facebook's announcement at f8, Google announced that Google+ is now open to the public. The search giant also announced new improvements including mobile group chat and search in Google+. Is that enough to make Facebook worried? "It really doesn't have to be: it has 750 million users and is probably the site that is most intertwined with our online lives today," wrote PC Magazine's Peter Pachal. But the problem with Facebook accelerating its changes, particularly on the news feed, is that people can respond negatively, he pointed out. So does that mean users are going to quit and head to Google+? Not likely, he said. "Google+, for all its cleanliness and interesting features, suffers from the lack of a central theme, and many new users aren't quite sure what to make of it."


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Yahoo, AOL, Microsoft: Frenemies in ad sales

Yahoo, AOL and Microsoft, longtime enemies in the online space, are now coming together on friendly terms in an effort to take a swipe at Facebook and Google in advertising. A new pact allows the three companies to sell ad inventory on each others' sites. The premium ad exchange is designed to help them snatch back some of the ad spending that's gone to ad networks in recent years, according to AllThingsD's Peter Kafka. In addition, Yahoo, AOL and Microsoft are aiming to convince big web properties to share some of their ad inventory, and to get big ad holding companies to funnel some of their purchases through the consortium, Kafka wrote. But the New York Times' Tanzina Vega believes the three companies will need to leap over several hurdles in order for the plan to work. The technologies they use to sell and place ads on their sites aren't yet compatible, she explained. "Yahoo has an ad exchange called Right Media, and AOL has Advertising.com, which makes much of its revenue from selling remnant ads. Other problems could include coordinating sales efforts and figuring out which sales team sells which ad space.

And some believe the plan is nothing new. "This is essentially more of the same thing that they have been doing for years, selling the same ad space the same way," wrote BNET's Erik Sherman. "Why should it start suddenly working now?" Other industry watchers believe the deal smacks of desperation. "In doing this it seems like they felt it was the only way they could combat the combination of Google’s display and the big ad network industry that's out there," Adam Kasper, EVP of digital investments for Havas Media, told Adweek's Ki Mae Heussner. "But from an ad buying perspective, it seems like you’re just slicing the same thing a different way." Search Engine Watch's Miranda Miller agreed, noting that Google and Facebook are clearly already ahead in the game. "What value do Microsoft, Yahoo and AOL have to offer users by pooling together second-class ads -- the ones classified that way because they couldn’t get rid of them to begin with?"

Wall Street Journal pushes live video, WSJ Social

Is the Wall Street Journal trying to think like a startup? Recent changes to its live video unit and a Facebook app seem to be hinting at that. What began as a twice-a-day video update in the Wall Street Journal's old-fashioned newsroom has blossomed into a full-blown app and three-and-a-half hours of live programming every weekday. WSJ Live is a video app for iPads and Internet-connected TVs and set-top boxes that brings live and on-demand programming from the Wall Street Journal Digital Network directly to users of those platforms. Neiman Journalism Lab's Ken Doctor was quick to hail it as a "model for the news industry." Newspapers can "talk the talk of becoming multimedia companies, but most are still text-bound," he wrote. WSJ Live "does a great job of leveraging the new technologies of the day and converging them to create an easy-on-the-eyes, easy-to-use new consumer product." The New York Times' Brian Stelter noted that the Journal already produces far more live video than other newspapers in the United States do. So why push that even further? It's "acting on the idea that video is fast becoming a critical part of news websites, even for the entities that have historically profited from words, not moving pictures," he explained.

Meanwhile, the Journal also recently announced the advent of WSJ Social, a Facebook app that filters the newspaper's content through a social graph within the social networking site. Forbes' Jeff Bercovici pointed out that the Journal has finally come to grips with the fact that it can't escape from how much time web users are spending on Facebook and other social networking sites. "The more of their time consumers spend on Facebook and other social networking hubs, the less they have left over for news sites," Bercovici wrote. But it's also about thinking about newspaper reading in a social way, he added. "Users choose whose streams they want to follow -- the official ones produced by the paper's, and each others -- and that determines what stories they see." So what happens to the Journal's pay wall on WSJ Social? That will remain in place, although a one-month sponsorship by Dell will temporarily make it free. There's an "obvious tension between providing articles on a public network like Facebook while still having a pay wall," noted GigaOm's Mathew Ingram. "It feels like the paper wants to have its cake and eat it too, and it could wind up with neither."

AP, newspapers eye mobile coupons

Coupon hotshot Groupon has inspired plenty of daily-deals wannabes -- and now newspapers want in on the action. The Associated Press has partnered with 40 newspapers to offer coupons and other promotions in a special section within papers' iPhone apps. The feature, dubbed iCircular, brings merchandise and product offers from multiple retailers to one program. paidContent's David Kaplan calls it a "play on two of the industry’s last advertising strengths: digital and pre-print circulars." iCircular is HTML5-based, which means it will be available on both a paper's app and its mobile site and on other formats later on. The AP said it will be in a test phase until the end of the year. "We’re going to be looking closely at several things in particular," Mary Junck, chairman of AP's board of directors' revenue committee, told Kaplan. "We’re going to be interested in seeing the audience numbers for iCircular and how often the deals are used. The newspaper partners have all agreed to do heavy promotion for this."

But the real test could be whether anyone actually uses deals in iCircular. "Will customers stand up and cheer? Or yawn that their geo-specific couponing needs are pretty well taken care of already by the stores' own sites and other earlier-to-market competitors?" asked Poynter's Rick Edmonds. He noted that iCircular is making a late entry into the market. First movers like Groupon and LinkedIn, and even retail sites such as Target and Best Buy, could have the advantage. But as newspapers face declining circulation -- and as more consumers replace traditional offline news with online content – they're finding themselves in a tough spot, and an effort to step into the mobile coupon space might have more benefits than drawbacks. As Edmonds wrote, "A significant presence in smartphone commerce would count as an important business win for an industry that hasn’t had many lately."

Research

Nielsen: Facebook sucks up Americans' online time

It's no surprise that Americans fritter away most of their online time on social media sites. And as that usage is growing, marketers are looking to offer up more data on those consumers' Internet habits. To that end, Nielsen recently released its "State of the Media: The Social Media Report," which takes a big-picture look at social media and Internet behavior. The research firm found that social media use accounts for 22.5 percent of the time that U.S. consumers spend online, compared with 9.8 percent for online games and 7.6 percent for email. "Social media is becoming increasingly mainstream," Nielsen's Radha Subramanyam told the New York Times' Stuart Elliot. As a result, "there’s a need for companies to engage even more strategically in the space" than they already do, she added.

The social media site that users spent the most time on was Facebook, whose users chalked up a total of 53.5 billion minutes on the site in May, up 6 percent from the previous year. Blogger.com came in second with 723 million minutes; Tumblr saw 623 million minutes; Twitter, 565 million and LinkedIn, 325 million. But ClickZ's Susan Kuchinskas said the numbers don't mean that traditional media is losing its mindshare. "Traditional content creators have found themselves increasingly mediated by social media," she explained. "While word of mouth has always played a role in media recommendations, social media, whether fixed web or mobile, allows one person's mouth to have global reach."

Digital a bright spot in ad spending growth

It's pretty widely acknowledged that as the economy becomes shaky, ad spending goes with it. In a sobering study, Kantar Media found that while advertising spending is still increasing, the rate of growth has slowed again. U.S. ad spending increased only 2.8 percent in the second quarter from the same period a year ago. But digital remains a bright spot. The numbers "are painting a mixed picture," Jon Swallen, senior VP for research at the Kantar Media's North America unit, said in a statement. Display ad spending rose nearly 13 percent in the first half of 2011, according to the study. For Q2 alone, online display ad spending grew 12.9 percent while search ad spending -- or at least search at Google -- increased 8.6 percent, both bolstered by travel, local service and insurance advertisers. In all, Internet media spending was up 10.4 percent. Despite the gains in digital, Business Insider's Noah Davis said the industry is "smartly adopting" a wait-and-see attitude. "If the economy tanks, ad spending will follow. If it recovers, however, the media industry should see a seventh straight quarter of growth."

Of Note

Digg Introduces Genre-Specific ‘Newsrooms’ (NY Times)
The social news web site opens a series of online newsrooms that will use social networks to determine the importance of a news story.

It’s Called Google Propeller and It’s Aimed at Flipboard (and Facebook, Too, Natch) (AllThingsD)
Numerous sources say the search giant is working on a news reader intended to compete with the likes of Flipboard and Yahoo Editions.

Amazon And Hearst Team Up, Pairing Print With Digital (Forbes)
The two companies expand their partnership so that Amazon will become Hearst’s largest third-party seller of print subscriptions for its magazines via digital channels.

Why Netflix is a cautionary tale for newspapers (GigaOm)
What kinds of lessons can we draw from the furor over Netflix's pricing change and the impact it's been having on the company's revenue? Here’s a hint: They’re not good.

Twitter to Start Publishing Promoted Tweets to a Broader Audience (Ad Age)
In its latest push to build ad revenue, the company is publishing Promoted Tweets into the timelines of users who aren't necessarily followers of the brands posting the tweets.

Foursquare Now Keeps Home Addresses Private (Mashable)
The site's new privacy option aims to help prevent users from unwittingly sharing home addresses with strangers.

Groupon Back on Track for Its I.P.O. (NY Times)
The online coupon giant is planning to put its initial public offering back on track even as markets remain rocky.

Delicious Has New Owners: YouTube Founders Chad Hurley and Steve Chen (ReadWriteWeb)
The two YouTube founders are acquiring Delicious for an undisclosed sum and founding a new company, AVOS.

News.me, the iPad Twitter aggregator, relaunches as a free app and spins off from Bit.ly (Neiman Journalism Lab)
The iPad app, previously 99 cents a week or $34.99 a year, will be free to all, and News.me will break free of Bit.ly.

 

openquoteThe so-called Google effect is merely the latest expression of a cognitive strategy that is almost as certainly as ancient as our species.closequote

Alva Noë, writer and philosopher

Google Is Not Making You Stupid (NPR)

 

The OPA Intelligence Report is a bi-weekly email summarizing and commenting on important news and research for the online publishing industry. As always, feedback is welcome at feedback@online-publishers.org.