Supernatural Agency: Online business tales

I just watched the demo video on Amazon of their new portable eBook reader Kindle that they launched this morning. Unfortunately I think this device is about three years too late to make a big splash. It seems well-designed with well thought-out software, EVDO access courtesy of Amazon (only to Amazon and a bunch of online media) and lots of available books, most at $9.99.

There’s just one problem and it’s a big one: I don’t know anyone who wants add another device to their kit in addition to the obligatory laptop and smartphone. I’m personally dreaming of the day when one iPhone type of device covers me for most of my access needs. As a writer, I’ve been using Google docs more and more, Gmail for email, and wireless for everything else. I can read online without eyestrain and I’m not a kid anymore- screens, including the little ones, are just so much better.

The other counterintuitive aspect of Kindle is that it is a limited device, proprietary to Amazon’s business model. Though it has a querty keyboard, it’s monochromatic and it doesn’t look like you can edit docs with it (you can email your docs to it and Amazon, for a “small fee” will convert them into their format). I don’t want a limited device, I want one that uses a browser. That’s the standard for mobility these days. They could have built this as an online application, offered it for free and made the money selling books.

With Apple (and no doubt others) rumored to start offering solid state sub-compact notebooks early in 2008, what relevance will this device have? The browser is where the action is and this doesn’t have one…

There are 1 billion Internet users worldwide right now. The remaining 5 billion humans on the planet are not connected. Right now the UN is working on getting the next billion users connected. The challenges include poverty, infrastructure and interference by various governments.

For domainers and the online advertising world the implications of this are huge, including:

• The enormous potential for growth on the Internet. There are a limited number of domains out there and those of us in the first billion own most of them.
• Potential ad spend growth online is far larger than any current predictions which are based on the existing user base.
• Sites and domains targeting global audiences with very different worldviews will thrive.
• Digital products will be the major growth sector because they do not require shipping and they can be priced to fit the demographics of a geo-location. The downside of this is piracy.
• Forget intellectual property as a business model. The only IP that will be protectable is your domain. Your content, ideas and business concepts will be copied over and over. Domains will become the currency that determines value on the web.
• Dot coms are the gold standard. As the web grows and piracy flourishes money will retreat to the gold standard. This always happens in times of great change.
• English, IMHO, will still be the primary language online, however processing power and bandwidth are going to mean real-time translation of site content. Think about this- a Mandarin speaker/reader visits one of my sites and Google auto-translates it on the fly. Can we auto-translate domains? I’m in flying car territory here…
• It took ten years for the web to hit one billion users. I’m guessing the second billion will hit a lot faster.

My biggest takeaway? Domains are the only safe harbor online, the biggest growth opportunity. Domaining is a teeny-tiny business right now. The ‘players’ argue amongst themselves over silly imagined slights and the entire domain blogworld is limited to a half dozen blogs. Watch for the big guys to enter this world, the Goldman Sachs, Warren Buffetts and hedgefund managers. When that happens our little crew of domain millionaires will find their world dramatically altered (of course they will get very rich in the process).

Here’s a scenario to ponder: What if Amazon got into the domain business? They have virtually every product imaginable to promote and huge amounts of user-generated content to leverage. They have enormous scalability and unlimited resources. It’s a thought…

While I typically agree with those who find Business Week to be a great contrarian indicator (get lauded on the cover, watch your your stock go down), this article on the impact of applications on iPhone and the Google Phone OS gets it.

Basically, software developers don’t like to develop for mobile because the phone industry is too greedy and too fragmented. Every carriers wants their own piece of the pie, a big one, and they want the apps customized so they only work in their network. In my own experience working for a web-based email provider we found that the telecoms we sold private label versions to would only pay a few cents per user. For the average developer this simply isn’t worth the hassle.

Now, with an SDK (software development kit) coming for iPhone and the rumored Google phone operating system, we’ll have environments on phones to run apps that are not associated with the networks. This will re-engage those software developers who walked away from phone apps. The key to this, as anyone who reads this blog knows I am obsessed about, is the full browser on the phone.

Bye bye .mobi.

Hello web 3.0 on a mobile device.

And cheers for not requiring a laptop just to check my mail and the web while traveling… Next year everything changes again.

Frank Schilling has a great piece on a long time domainer who understands where this whole thing is going. It’s worth the read just to see his sites which blow away the average parked page.

The fascinating thing about this piece is how it demonstrates how primitive and early stage the entire domaining market is. Putting up simple, well-designed affiliate sites on domains puts someone five years ahead of the rest? Frank is a very successful domain entrepreneur so I respect his POV but this is ridiculous- If people are making millions just parking thousands of longtail domains and trading, imagine what the untapped potential is?

Prediction: Some big money is going to come in and back someone with a vision and change the whole model. The challenge is manufacturing highly relevant content and matching it to relevant domains. Parking companies try to automate this but just end up with generic content based on primitive keyword matching. On the other end we have things like blog networks who are figuring out the content generation side but don’t understand business strategy. The people who match these two things and add in a strong monetization strategy that is highly relevant to the domain subject will be the leaders.

This is why our business has a founder who understands SEO, SEM, design and programming and a founder who is a writer/producer with strategic marketing skills. You need both to move beyond what will soon be laughably primitive models like the current parking systems. It will be a lot more work but the values will be exponentially higher.