virtualeconomics

Optimise what?

The web is shrinking, says Ben Elowitz. Strip out the growth of Facebook and the rest of the web, the "searchable web", shrank by 9% in the 12 months to March 2011.

This is game-changing for publishers, possibly the emergence of a whole new strategy cycle. If all you're doing is optimising pages of content for Google, well...

(1) you're part of a zero-sum game in which every publisher in your category uses the same publicly-available data to chase the same audience as they search on the same keywords;

(2) the stuff you write for Google isn't all that appealing to people so you'll get them through the door and watch them bounce out after they've seen one page; and

(3) that pie you're fighting for a share of is shrinking anyway (hee hee, mixed metaphors are funny).

Surprisingly easy to get children interested in newspapers

(My twins Adam - on the left - and Russell - on the right - playing with a newspaper. For those who might care it's a copy of the Telegraph. I'm sure they imply no disrespect to the Telegraph in particular.)

Don't get into a market where your customers want to hit you

According to a Mintel report quoted today in the Economist, "Britons are far more satisfied with the service they get from their supermarkets than from their banks". The Economist draws from this the lesson that Tesco should get deeper into retail banking, competing to offer current accounts.

Of course the opposite is the case.

It's not that supermarkets are good at customer service and retail banks are bad, so that for example Tesco will be able to magically do well something at which Barclays and HSBC are failing (in fact, HSBC's First Direct won a top award for customer service only last year). It's that dealing with a retail bank, like dealing with broadband providers, public transport or most branches of the government, is unavoidably infuriating for many customers.

Learning to be the guy who turned down the Beatles

In a recent post I talked about the media tech bubble ("of course it's a bubble"), hypothesising that the clearest sign of a bubble is that every single IPO is being priced as if it's the next Google...which of course they can't all be. So some brief thoughts on why this might be.

Nobody wants to be the guy who turned down the next Beatles (or the next J K Rowling, or perhaps more germanely the next Google) - every industry has its legendary poor dumb bastard, "that guy" who had the Next Big Thing sitting right across his desk and passed. I've worked on acquisition strategies before with people who seemed more concerned than was entirely healthy that they not be "that guy".

BT Fon simply doesn't work

When BT first took an investment in Fon I thought it a great innovation. The ex-monopoly doing something innovative and useful that would leverage its assets (near-universal coverage) and provide a real consumer benefit.

Problem is, it doesn't work. I've tried using Fon when I'm away from proper wireless access a couple of times and it does one of three things:

(1) works until the connection just vanishes indefinitely

(2) works but requires you to log back in every few minutes or

(3) works but requires you to turn the connection on and off every few minutes

I lost and manually reaquired my Fon connection twelve times in the course of writing that last post. It isn't even a very long post and I wasn't doing much else at the same time.

Of course it's a bubble

Marc Andreesen argues it's not a bubble because the big tech companies - Google, Apple - still have sensible P/E valuations and anyway it can't be a bubble if everyone calls it one. Let's look at some counterpoints.

Facebook, Zynga, Zipcar, LinkedIn, Demand Media, Twitter, iwantadoor.com (yes indeed) and yesterday's big story, Groupon.

What makes all these companies signs of a bubble? Everything is priced as if this market has no losers. Everything is priced to win, win big, face no competition, face no meaningful downside risk and not "do a MySpace". 

Please sponsor me

(Off topic, of course). In a couple of weeks my father and I will be walking the 18 miles of the Timble Trail in aid of Wheatfield's Hospice, a palliative care unit in Yorkshire. If you've ever found my blog useful or informative, here's the chance you've been looking for to do something nice for me and punt me a few quid in sponsorship. Also, if you've read this far and don't yet know that Virgin Money now offers a non-profit charitable giving website that you should use for your own fundraising (instead of Justgiving, which is a for-profit and skims some off the top), there's some more free advice about online media. Just so it's not all off-topic.