Google’s
acquisition of tiny Web 2.0 company Writely was big news in the blogosphere
last week. This week it’s hitting the
mainstream media. BusinessWeek’s
analysis of the importance of the deal was particularly revealing.
“In a small deal that signals big
changes on the Internet, Google announced Mar. 9 that it has acquired a Silicon Valley sensation called Writely. The online word
processor is still in the testing stage, but it's attracting attention as a free
alternative to relatively expensive desktop applications like Microsoft (MSFT )
Word.
But the transaction stands out for
bigger reasons. Writely is one of dozens of companies that are infusing
once-static Web pages with the power, speed, and features of sophisticated
desktop applications. And by combining these online applications with the new
wireless and broadband communications ability of the Web, they are redefining
the Internet itself.”
In other
words, this is more than a version upgrade. New applications, greater broadband penetration and shifting consumer
adoption models are combining to create dynamic user experiences. And they’re challenging traditional media to
keep up.
A recent
study by Columbia University's Graduate School of Journalism shows that newspaper revenues increased by a mere 1 – 2 %, largely because of
an increase in revenue from online ads of 30%. The study reports similar dismal numbers of other offline channels.
And the
Hollywood Reporter draws an interesting comparison in CPM values.
“The value of a viewer is in flux.
The average hour long primetime series generates $3.46 million in net
advertising revenue, or the equivalent of 41 cents per viewing household. The
same program would generate $1.39 in gross receipts for the content owner per
$1.99 iTunes download, based on a 70-30 split with Apple, according to
estimates from veteran analyst Larry Gerbrandt of Nielsen Entertainment
Reports. If a content owner proposes providing downloads off of its own Web
site -- as ABC.com, CBS.com, NBC.com and Fox.com have started to do -- they
retain all of the $1.99 fee as incremental income.”
Beyond CPM,
consumer generated media amplifies value. Social networks translate to trusted relationships. Companies large and small can leverage this
into new marketing opportunities. According to Steve Rubel, Forrester Research recently issued a report on
social computing which dramatically demonstrates these dynamics. He published a chart on his site today, which
is a great primer for the new services, both from the perspective of large
companies who want to leverage their social networks and from the perspective
of newcomers looking to extend their own marketing advantage.
Technorati
Tags:
Advertising,
Forrester,
Marketing,
Social Networking,
Web2.0
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