Supernatural Agency: Online business tales

Adobe is officially launching its Flash-based hybrid desktop and web development platform, known as Air, this week. The platform enables application developers to build programs that run in sync as web applications (accessible via any connected device) and as desktop applications (accessible on your machine when you don’t have Internet access). These programs can run as Internet-connected widgets, meaning they don’t require a traditional browser. Microsoft offers a competitive platform called Silverlight. Google also has something similar in the works called Gears. Together, these new models for interacting with the Internet have the potential to totally change the way we access and utilize the web. So how do they affect the domain world?

These platforms could eliminate the exclusivity of access to web information that unique domains offer. In fact domains could become a much smaller piece of the pie because we won’t travel to individual sites as frequently as we do now. Just as Google is the default starting point for most web activity, various application-driven sites will suck up huge amounts of traffic covering very large amounts of information categories, all on a single domain. For a simplistic (on the surface anyway) example, take a look at Amazon. The company took ten years to reach profitability but when it did last year the results were spectacular. The reason it took so long is that Amazon was building an enormous application around shopping, the default shopping application. They literally carry or offer everything. Think about it. If you want to buy a sophisticated piece of electronic test equipment, say a Fluke 700, you can get it via Amazon. While most of us think of Amazon as a glorified bookstore, it is, in reality, the largest consumables site on the web, a sort of AOL for shopping. As this site grows all those millions of consumable-focused domains will become marginalized; the mom and pop stores of the Internet. Amazon is a platform, an application for shopping and a search engine.

Now imagine the ability to easily build similar search-focused information delivery platforms. Any kid with programming skills can do so with these new tools like Air. If they build them and put them on a unique domain (like the hundreds of goofy Web 2.0 sites out there) they will sink into the gigantic maws of the web and disappear. If, instead, they choose to join an online ecosystem like those being offered by Google, Amazon and others, they will be integrated into those systems’ search, marketing, fulfillment, data and monetization tools, giving them a chance to survive and thrive. But not on a unique domain.

One of the outcomes we’re already seeing is the commoditization of brands on the web. If I want a Honda Accord I really don’t care where I get it. As long as it’s the color and model I want (there are only 4 or 5 choices) and the price is the lowest, I’ll buy it via an Amazon or eBay. It’s a known commodity. Once I’m past an initial brand decision and on the web my intent is a deal. I’m not being convinced anymore to change brands. I don’t need cars.com, coolrides.com, convertibles.com- all I need is a search and that search is going to point me to a shopping portal 90% of the time.

This POV isn’t doom for domainers; it’s a scenario, not a reality. But it is a scenario that is unfolding as web access becomes ubiquitous and platforms like Air and Silverlight keep us synced with the web all of the time. Food for thought.

This is all, of course, speculation. But think about this: what happens when you can store terabytes of information on your iPhone? Maybe you keep a copy of the million most popular web sites on there, a copy that automatically updates itself each time your device connects? You might not need any other sites…

The NYTimes today dissects Microsoft’s recent reorg of their executive team managing online operations and it is not pretty. The executives who would be managing a Yahoo integration are tasked with working both on online initiatives and Vista (!???) two completely unrelated businesses. The online businesses are completely distinct from the operating system/desktop business and there is not (or should not be) any crossover.

Here’s the Times take on what looks like the screwiest org chart imaginable:

“The online business will now be split between four executives, who all work for Kevin Johnson, a former I.B.M sales executive. Three of those four make up a group charged with the overall strategy and marketing for Microsoft’s Internet services.

Marketing and product management for Microsoft’s online operations will be handled by Bill Veghte, who also performs that role for Windows Vista and its successors. (His unit is called the online services & windows business group.)

Satya Nadella, a longtime engineer, now will run what is called the search, portals and advertising group. Mostly, this will look after the engineering for Microsoft’s Web search, advertising systems and related systems. Awkwardly, he will also have responsibility for the programming of the MSN portal, which is run by Joanne Bradford.

Mr. Nadella doesn’t even control all the technology related to the Internet operations. Steven Sinofsky, runs engineering for both user interface of Windows and the Windows Live services like e-mail and instant messaging. Mr. Sinofsky, however, is not part of the three-person group overseeing online strategy.

The third member of the Microsoft online triumvirate is Brian McAndrews, the former chief executive of aQuantive, the advertising company Microsoft bought last year. His area is dubbed the advertiser and publisher solutions group, includes both engineering and marketing for the company’s advertising systems.”

The only logic behind this mess is that Microsoft so desperately needs to fend off the emergence of online applications that is has to cripple its new management team by giving them an inherent, every day conflict of interest. The problem here is that Office, their biggest cash cow, may see its market disappear overnight. Only by tasking their team to maintain links between the desktop and browser-based applications can they hope to stave this off.

Google, by comparison, has no such strategic imperative. They only need relevant traffic so they can give away increasingly better online software and still support their advertising model.

If I worked for Yahoo, I’d be clearing out my cube.

If you have content on your domains and don’t offer an RSS feed you’re missing a huge opportunity. RSS feeds are rapidly replacing email lists which have been a  powerful marketing tool, especially if you do affiliate marketing. To take advantage of RSS you have to develop sites that have their content updated frequently, i.e. blogs.

This is, in essence, the opposite of parking. Parking is a totally no maintenance way to monetize but the trade-off is extremely low revenues. It is the classic ‘throw it at the wall and see what sticks’ marketing, aka shotgun marketing. User-generated content sites like blogs are the opposite- they require regular content upgrades, preferably daily. However they also have the potential to generate significant revenue if you chose the right subject (and BTW, domaining and SEO/SEM are not the right subjects- this blog doesn’t make money from those AdSense units down there).

The problem with the blog network model is time- it takes a lot of it. The answer is to invite guest bloggers and or paid writers to write for your blog. You find them on Craigslist by running a free ad. You pay them peanuts because writers are notorious for undervaluing their services. $5 a post? Why not? You only want them to post once a day and not on weekends (total waste- traffic dies on weekends. I guess we read blogs at work…), so $25 week to keep a steady stream of content.

Consider this cost as arbitrage. You pay $xx dollars to get traffic which you convert to $xx+ via ads and affiliate programs. And you’re building traffic and reputation which increases the value of the domain.

Back to RSS. Prominently display the RSS feed subscription offer and include a link to this video which does a fantastic job of explaining why regular folks should use RSS to change the way they surf. The reason you’re pushing this hard is that once you’re in their feed reader they will return over and over and return business is the lifeblood of any business. Remember, getting traffic is expensive so you really want to keep the traffic you get. When you go into your site Analytics (and if you are not using Google Analytics shame on you- it is free and a fantastically useful tool) look at the New Visitors number. If your traffic is steady but you have a high number of new visitors it means they’re not returning. Aggressive use of RSS can help change that.

Apple published 47 patents last week.

I was in an Apple store yesterday to check out the MacBook Air. They had a window display with one Air floating in the middle and slowly turning. While my girlfriend and I were admiring the thing (they are much cooler in person than any image shows) a group of teenagers surrounded us and were practically drooling over the machine. All pronounced that they must have one.

We went in and picked one up. They are unbelievably light and delicate. I would not underestimate the power of this approach to laptop design for Apple. They will iron out the kinks and own the ultra-lightweight full size laptop market, which will evolve into the laptop market. No one is going to want to lug the bricks around once they’ve picked these things up.

Like the iPhone and iPod, they are redefining a genre here.

This from Techcrunch too: A new build of Apple’s Safari browser is 2-6x faster than Firefox. They say it radically changes the surfing experience. Still in the developer stage.