Five Trends Shaking Up the Internet
by Kurt Schiller
In the world of technology, certain years can often be characterized by a specific trend, theme, or innovation. Perhaps 2008 was the year of Enterprise 2.0, while 2009 was the year of social networking. But no single trend can capture the state of technology entirely for a particular year, and 2010 is no different.
That doesn’t mean that some trends don’t stand out above others. The content industry continues to adapt to the internet, while users continue to expand their online presences across more services, more sites, and more devices. So take a look at these emerging trends to get a glimpse of the internet of tomorrow.
Not long ago, decisions about news coverage were guided by human experience and insight. From publishers and editors on down to individual reporters, a chain of experienced professionals decided which stories received coverage and which were set aside. Demographic information about subscribers and their interests played a role, but the data arrived too slowly to guide the day-to-day operations of content creation effectively. These days, companies can track what topics draw the most views on a daily or even hourly basis, and a number of established players and promising upstarts are turning to software, rather than human judgment, to guide and to dictate every step of content creation.
Analytics-driven content is a deceptively simple business model. Content creators can examine popular search trends to determine what topics are likely to attract the most attention. Assignments to write articles (and shoot videos) on selected subjects are assigned to vast pools of freelancers at low payment for a rapid turnaround. The resulting articles are edited, search optimized, and posted on updated sites to draw the greatest advertising revenue by pulling in the largest number of search hits. Big names in the field include Demand Media, operator of popular sites such as eHow.com and CRACKED.COM, and Associated Content, which Yahoo! acquired earlier this year for more than $100 million.
It is easy to dismiss analytics-driven content as nothing new. After all, the print publishing industry is no stranger to the demands of advertising revenue. But Ken Doctor, a publishing analyst with Outsell, Inc. (which also provides analytics), says this trend goes much further in letting advertising guide content than most print media ever did.
“It’s basically a reversing of the stream,” says Doctor. “For centuries, it has been journalists who decided what to write, what to edit, what to put into a publication, or more recently a radio or TV broadcast.”
But for Doctor, that’s the old way. “The new way of doing it is really the opposite,” he says, “and Google is really the first proponent of this, in how they did search and how they did news stories. They said, ‘We don’t have people do this. It’s all an algorithm.’”
And it’s not just the traditional online sources that are turning to analytics-driven content, according to Doctor. Demand Media syndicates content to a variety of traditional news organizations such as USA TODAY and the Houston Chronicle.
For an example of how analytics-driven content operates, Demand Media’s recent IPO filing uses several proprietary algorithms to automatically identify emerging trends and hot topics, which are then passed along to a pool of more than 10,000 freelancers. In 1Q 2010, the company used this strategy to create more than 5,700 articles and pull in 550 million page views, including 86 million unique visitors. According to comScore, Demand Media’s sites represented the 17th largest U.S. web property in June of this year.
As with any new frontier, there are still some kinks to work out. For example, Demand Media continues to operate at a loss, despite reported revenues of $114 million for the first half of 2010. Nevertheless, the company is steadily becoming more profitable and continues to make year-over-year gains.
Analytics-driven content clearly has benefits as a content creation model, but Doctor says it also has some problems of its own. Chief among these is a tendency to value quantity over quality. In an article for Harvard University’s Nieman Journalism Lab, Doctor wrote that Associated Content employed 15 full-time editors to handle as many as 2,000 articles per day. In that same article, then-CEO Patrick Keane says his editors focused on “making sure the title is correct, the story’s not gibberish and not created by a bot in the Philippines.”
Ethics becomes another potential problem. With an emphasis on maximizing advertising revenue, it’s not obvious how clear-cut the advertising and editorial sections of such companies are (most traditional media strives for objectivity). And because the biggest players in analytics-driven content are relative newcomers to the field of journalism, Doctor says that established codes of ethics are less common than in other news fields. “I would urge people to pressure these companies to adopt basic codes of ethics on credibility and conflicts of interest,” he says.
Although Doctor thinks there will always be a place for more thoroughly researched and edited “higher-end” content, he also thinks the trend of inexpensive, quickly produced content isn’t going away anytime soon. And he adds that traditional media companies ignore it at their own peril. “I would predict that 5 years from now any company that’s in large-scale content creation will be, in part, analytics driven,” he says. “It’s like Pandora’s box. Once you open it up, you [have to] look. Once you have data, you’re going to pay some attention to it.”
Google in the Living Room
In May, Google and partners Sony, Logitech, and Intel announced Google TV, a new platform that has the potential of bringing the internet into the living room in a big way. Powered by the Google’s Android operating system, the platform will be available in two versions: 1) as a set-top box, and 2) integrated into an upcoming line of Sony TVs. In addition to providing access to Google’s Chrome browser, the platform will let users tap into Twitter, Netflix, YouTube, and Hulu directly through their TVs. While there’s no concrete pricing yet, a customer survey released by Dish Network, which will reportedly support Google’s hardware on its satellite service, hinted that the set-top box may sell for between $200 and $300. With the first Google TV devices set to hit stores in September, users didn’t have to wait long to get their hands on it.
Although set-top internet boxes such as WebTV were available as early as 1996, digital media analyst Paul Zagaeski points out that the internet landscape is quite different now. “Today, there’s a whole lot more reason to want to have access to online content from a living room from a standard TV,” he says. “And not just because you want to search the web and do searches and check out blogs and other things. The internet, to a large extent, is starting to look and sound an awful lot like TV as we’re used to seeing it in the broadcast or cablecast world.”
Zagaeski notes that while there may not be an existing demand for internet functionality on televisions, consumers have shown an increasing appetite for new ways to access online content. And since the Android Market app store will be integrated with Google TV in early 2011, developers could soon be targeting couch-bound users in much the same way as they are currently targeting on-the-go mobile users. Whether they’re interested in collaboration tools or content apps, mobile platform users could transfer their expectations to the big screen alongside sports and movie channels.
And that represents a threat to the way cable companies currently operate, according to Zagaeski. If consumers can access premium entertainment from online sources, it could take subscribers away from premium cable services such as movie and sports channels, on-demand purchases, and DVR equipment, which are all key revenue sources, according to recent quarterly reports from Time Warner Cable and DIRECTV.
But despite the threat to their business model, cable companies are not likely to pass up this opportunity completely, says Zagaeski. “They also recognize the internet is coming. There’s a lot of entertainment on the internet,” he says.
And there is one key factor working for some cable companies: More internet-enabled functionality on TVs could mean even higher demand for high-speed internet. And some of the largest players in the digital TV market, Comcast and Verizon in particular, also rank among the country’s largest high-speed internet providers.
Android’s share of the global smartphone market jumped 8% since 2009, more than doubling the growth seen by Apple’s iOS platform during the same period, according to figures released by Gartner in May. The increase also placed Android ahead of Microsoftcompeting Windows Mobile platform, which fell 3.4%. Although Android still lags behind Nokia’s Symbian and Research In Motion’s (RIM) BlackBerry OS worldwide, the once-plucky upstart is on its way up in the world. In fact, for 2Q 2010, Google’s mobile OS became the U.S.’s most popular smartphone platform.
Mark Donovan, senior vice president of mobile for comScore, thinks Android’s growth will continue. “We don’t see any signs that the Android velocity in the marketplace is going to slow down,” says Donovan. “I think we will continue to see Android gain share.”
Google’s decision to spread its product across many platforms was a smart move, according to Donovan, because it allowed the platform to gain popularity and extend across more than one manufacturer. “The distribution strategy that Google has adopted, using multiple handset manufacturers and over multiple carriers, has been a key part of what has given this market momentum,” he says. “Contrast that with the iPhone’s approach, which has been a single model at a time.”
Gartner’s August 2010 smartphone report highlighted another key benefit of Google’s diverse approach to manufacturers: It permits the company’s OS to reach consumers at many different price points. The platform is available on phones that range from the entry-level $50 LG Ally to the $200 HTC Incredible (based on pricing from Verizon, with a 2-year contract).
Although the battle between Google and Apple continues, both companies made their gains largely at the expense of other competitors, not each other. Microsoft and Palm (which was recently purchased by HP) were the hardest hit by the rising popularity of Apple and Google, says Donovan. RIM also saw its share in the U.S. drop in recent months as Android surged into the lead.
If Android continues to make gains, as Donovan suggests, it would leave Google in a better position to leverage its Android Market app store across additional platforms, including Google TV and the rumored Google tablet. That could give it the edge on drawing users to these platforms and strengthen the allure of the platform as a whole. And with Android’s more free-wheeling approach to apps, which places few restrictions on developers, it would also be a boon to opponents of the rigorous policies and approval process that characterize Apple’s competing App Store.
Niche Social Networking Sites
Although social networking site LinkedIn lags far behind Facebook and its 500 million users, it still went a long way in giving social networking a professional sheen. By helping users keep their business lives separate from vacation plans, baby pictures, and videos of kittens, LinkedIn provides a valuable professional resource for its 75 million users. Although LinkedIn and a handful of competitors provide a social media gateway to the business community, a number of up-and-coming social sites such as UniPHY and BiomedExperts are taking social media’s normally broad focus and turning it toward specialized niche purposes, where it is much easier to find fellow researchers in a specific field on a site that is devoted entirely to that profession.
BiomedExperts, which was developed by Collexis, provides a good example of how such sites operate. With 300,000 active users and 1.8 million prepopulated profiles (which are generated based on 10 years of published research data), the site is focused entirely on researchers in the biomedical field. Users can track professional connections, co-authors, and published papers to facilitate collaboration.
The community problem-solving focus of such sites can offer advantages over broader professional sites such as LinkedIn, according to John Blossom of Shore Communications, Inc. “[P]roducts like AIP’s [UniPHY] portal combine personal profiles with the ability to perform searches for experts based on what research they have published,” says Blossom. “The platform enables both contextualization and communications for these professionals that general purpose social networking platforms cannot provide.” The sort of problem-solving, task-oriented focus found on such sites is drawing in users and companies in a way that a broader site such as LinkedIn might not be able to, he says.
“When your network is clearly task-driven, it’s easier to justify your investment in maintaining the information used by that network,” says Blossom. “Especially as these networks begin to help drive both the top line and bottom line of businesses seeking opportunities and advantages, it’s more likely that investments in more broad-based social networks may be taken more seriously beyond their typical use as sales, marketing, and recruiting channels.”
But these niche sites can also have drawbacks. Fields that require collaboration across multiple professions or disciplines might find the specialization of such services limiting or, at least, inadequate. And because that same specialization limits the number of participants on this sort of social network, Blossom argues that such sites also decrease their usefulness as networking resources by offering fewer potential connections and contacts.
According to Blossom, neither broad sites such as LinkedIn nor specialized sites such as UniPHY can serve every need of every organization. “People need both approaches to social networking, so they are likely to maintain professional presences both in broadly based social networks and focused professional social networks,” he says.
HTML5, the latest revision to the markup language used to create the basic appearance of nearly every website, has been under development since 2004. But unlike previous versions, HTML5 is designed to do more than simply change how images are displayed or add a new way to format tables. With features such as a 2D graphics engine, geolocation data handling, an internal database, and video playback built right into the standard, HTML5 isn’t just for web design: It’s practically a platform of its own.
Many of HTML5’s features are already commonplace. For instance, 2D graphics and animations powered by Adobe Flash and Microsoft Silverlight feature prominently on many sites, while database platforms serve needs for consumers ranging from the home user to the enterprise. But HTML5 is unique because these features don’t require third-party plug-ins or complicated back-end functionality. Complex web apps could actually be built entirely in HTML5.
But the real question is when HTML5 will arrive. In official terms, HTML5 will only become the new standard when it is ratified by the W3C (World Wide Web Consortium), the web’s governing body, and that could take several more years. But Gartner analyst David Smith says the practical reality is a bit more complicated.
“The big thing about HTML5 is you’ll find these two really extreme opinions, both of which are wrong,” says Smith. “One of which will say, ‘This will take 10 or 11 years to be formally ratified, so I’ll deal with it then.’ On the other hand, you’ll find people who are maybe a little too bullish.”
Smith says that many parts of HTML5 are already in use and are supported by browsers such as Safari and Chrome, specifically the 2D drawing and video playback features. There are even apps available. Google’s Wave collaboration platform was built largely with HTML5. And online art community deviantART recently released Muro, a digital drawing app powered entirely by HTML5, and the app even works on the iPad.
Because HTML5 is platform-independent, Smith says that it holds a particular appeal for the mobile realm. “In mobile, what you have is a highly fragmented market, lots of operating systems, and really no sign that that’s going to consolidate anytime soon,” he says. “So there’s really a need for something that goes across all of them.”
Assuming support for HTML5 becomes widespread in the mobile sphere, it would mean the same app could run just as well on a vast number of smartphones and tablets using just a standard browser. And since both Apple and Google are vocally supporting the platform, widespread adoption of HTML5 seems more likely than not.
Finally, there’s the question of what HTML5 means for third-party plug-ins. In an open letter titled “Thoughts on Flash,” Apple CEO Steve Jobs claimed that the availability of HTML5 and a handful of other factors made Flash “no longer necessary to watch video or consume any kind of web content” and encouraged Adobe to focus on developing HTML5 tools rather than continuing to emphasize Flash. However, an April report from Forrester Research, “Does HTML 5 Herald The End Of RIA Plug-Ins? Not Really,” disagreed with Jobs’ view. The report indicated that it believed HTML5 would not replace plug-ins such as Silverlight and Flash for “at least the next five years.”
The Forecast for the Near Future
Whatever direction innovation takes the web, it seems that no one technology, platform, or market force holds all the answers. As Gartner’s Smith notes, “I think it’s important to look at HTML5 in a broader context, what we call the modern web. There isn’t a fancy name like Web 3.0 that you want to call the modern web.”
“Long term, maybe not even that long term, it is a platform of its own,” he says. “The modern web is its own platform and it’s becoming one more and more.”