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Americans really dig social media… but Canadians love it.

Yes, the blogosphere and ‘Web 2.0’ are filled with fluff, idle chatter, and, quite frankly, a lot of crap. However, if you learn to filter the junk, as you do with your mail, e-mail, or television, the rewards can be extremely meaningful – and valuable to business.

I live on Wikipedia (and often am driven their by Google). I do a lot of research and reading and find the quality on Wikipedia to be superlative. In fact, while it has its critics, I’ve yet to encounter a credibility gap. And yet, the reliability of more traditional, scholarly sources are not always as reliable.

The single most credible survey I’ve found to date confirms what I’ve been saying for some time: Web 2.0 is still a lot of hype, and not a priority for many.

A Robert Half Technology survey of 1,400 CIOs in the U.S. found:

• 14% of organizations use blogs
• 13% use social tagging software
• 11% use wikis

Meanwhile, more traditional technologies are far more popular:

• Online training is used by 47% of the organizations
• Video conferencing is used by 34%
• Collaborative workspaces (e.g. SharePoint) is used by 24%

Now here’s the killer: 72% of CIOs have no plans to use blogs in the next 5 years; 74% no plans to use wikis (a scientifically representative telephone survey of 1400 CIOs, not a self-select, voluntary web survey).

Read my full column:  Web 2.0 not a priority for CIOs

“'Time Leadership' is my philosphies and musings on leading SYNNEX Canada, a billion dollar wholesaler of computer equipment,” says SYNNEX Canada CEO Jim Estill when describing his blog. “I call it CEO Blog - Time Leadership because of my keen interest in time.”

Recently the author of a book and audio CD called Time Leadership Audio, Estill writes about many subjects as it relates to his work and days. Personal subjects are not taboo on his blog and he in fact talks very little talking about his company (a home page disclaimer reads: “This blog represents my personal views and not those of SYNNEX or any other company”).

Estill’s most recent postings include:

• Managers and Leaders - Are They Different?
• The Importance of Sleep
• The Perfect Day
• Inventoritis - Don't love your Baby Too Much.
• More on Success Habits
• Lunch with Tony Blair and Time Vs Energy

Though he clearly is not a shy leader and communicator Estill decided he needed to communicate more with his constituency – including staff, customers and vendors. Authoring a blog is but one tool Estill has seized in enhancing these communications. Today, he communicates with all of those constituencies and more through his CEO blog that he’s authored since the Spring of 2005 (he presents this case study at the upcoming 2008 Social Media Summit Canada Conference in Toronto, ON from March 31 - April 2, 2008).

Broken down by percentages, Estill’s CEO blog audience is comprised of:

• 25% staff
• 50% suppliers/customers/industry
• 15% personal development/bloggers
• 10% friends/contacts

Though the blog is an external one on the public Internet (at http://www.jimestill.com), a principal audience of the blog are SYNNEX employees (up to 25% of the readers).  Estill says that the blog is of interest to employees because it “humanizes” him as CEO and provides a forum for 2-way communications (that isn’t always possible given the demands on the time and schedule of a busy CEO).

At the ripe age of 19, Estill started a computer distribution company - EMJ Data “from the trunk of his car” in 1979. The company grew to $350,000,000 in sales and then sold to SYNNEX in Sept 2004. Estill remains as CEO of the company that now sells  about a $1 billion in computer products in Canada.

“We sell all the brands you would recognize like HP, Apple, Intel, Lexmark, Acer, Sony, Microsoft etc through computer resellers and retailers from Future shop and Zellers to Bob's computer store.”

Among the reasons Estill cites for starting a blog:

• To keep in touch with:
• Staff
• Vendors
• Customers
• It will get read by your staff
• It helps personalize you
• It adds to your influence
• Good for laying out strategy
• To dispel mystery
• To share opinion

Estill dedicates about 2 hours per week to blogging and admits, “It requires commitment and thought.” Though he points to his own success and recommends blogging to others, he does suggest that blogging is not for everyone and shouldn’t be undertaken “if you do not like to write.”

Estill offers a number of tips for blogging:

• Have a few “in the can”
• Use other people’s material
• Use guest bloggers
• “Not perfect is good”
• “Careful of being too safe, but legal is real”
• Keep a paper archive
• Learn how to write an article in 20 minutes
• Use or cite book reports
• Re-use your past material including your blog material
• Post by email
• Keep posts short (400-500 words) or even a paragraph
• Avoid politics, religion and ghost-written articles

--

Learn more about this case study and other social media / Web 2.0 case studies at the upcoming 2008 Social Media Summit Canada Conference (hosted by the Advanced Learning Institute) in Toronto, ON from March 31 - April 2, 2008). Three days of Web 2.0 best practices, case studies and learnings for which you can Register Online.

“Collaborative tools are overloading employees and killing productivity—to the tune of $588 billion a year, according to a January study by Basex, a collaboration technologies consulting firm,” writes Brian Watson of CIO Magazine (see Web 2.0: Too Good to Be True?). “It’s the money-saving argument that’s getting pushback lately.”

Web 2.0 does not deliver the ROI, does not live up the hype, and is not even close to being a top priority for senior management (not all, but most).

A CIO Magazines study, Top Technology Priorities for 2008 finds that even techies don’t consider Web 2.0 as a priority. A survey of 250 “top IT executives” from a collection of small, medium and large organizations doesn’t even touch on the issue of Web 2.0.

Continue reading "Web 2.0 fails the grade, according to executives" » (on Content Matters)

How pervasive are social media tools (such as blogs and podcasts) becoming? Here are some of the numbers (taken from my CNW seminar series Social media (Web 2.0): are you in?):

·         There are approximately 55 million English language blogs – 45,000 new blogs created every day

·         44% of web users in the U.S. read political blogs

·         20% of Canadians say they read blogs on a regular basis

·         Three of the top 8 most trafficked sites on the Internet are social media sites that didn’t exist a couple of years ago (e.g. YouTube.com)

·         13% use RSS (real simple syndication ) for reading

·         29% of U.S. adults who own MP3 players have downloaded podcasts (The Pew Internet & American Life Project)

Listen to the complete webcast of my and Brent Holliday’s presentation Social media (Web 2.0): are you in?

Also includes a link to the Social media checklist handout and the presentation slides.

Tips for adoption

James Robertson has a number of tips for adoption:

• Create a prototype or pilot.
• Use stories to articulate (and capture) needs.
• Build on existing platforms.
• Use case studies from similar organisations.
• Be passionate about the right things.

See James’s complete list of tips for adopting enterprise 2.0.

My own tips for adopting social media tools:

• Social media is reinventing the Internet, creating a space where your audience can talk about you in a whole new way. On a regular basis, monitor the social web to see what is being said about you.
• Ensure you’re aware of which community websites (e.g. YouTube) are growing in popularity and evaluate how they might change the way people talk about your organization.
• Planning is an essential requisite for success. Develop a plan that is based on a thorough assessment and contains measurable success indicators.
• Leadership must set the tone. Your executives must be leading the dialogue and controlling the message.
• Relevant, up-to-date and valued content that supports, promotes and details your products, services and competitive advantages.
• Know the link between your website, sales and customer service. What is your website worth?
• Understand the ingredients of a good blog. Benchmark and cherry-pick from the leaders (e.g. Boing Boing, IntranetBlog.com, etc.)
• Keep pace with the trends and best practices, technological advancements and latest developments. Subscribe to newsletters from leaders such as CNET, eMarketer and Prescient Digital Media.

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The news that Google will pay at least $900 million in advertising revenue to have its search boxes and keyword-driven ads on MySpace helps to answer an important question about social networking: can companies monetize the strong traffic growth of this Web 2.0 phenomenon?

The deal means that Fox Interactive is starting to see a return on its $580 million acquisition of MySpace. Google, in turn, is expected to realise net revenue of $50 million to $200 million from its deal.

So there’s money being spent, and not just by Google. Debra Aho Williamson, Senior Analyst with eMarketer, writes in her breakdown of the deal that it will have no significant impact in 2006 because the payments do not start until 2007. eMarketer estimates that MySpace will generate $180 million in US ad revenue this year, two-thirds of total revenue in the social networking category.

“As for succeeding years, News Corp. executives stated in an Aug. 8 quarterly earnings conference call that less than 10% of the $900 million guarantee is earmarked for 2007. That leaves around $810 million to be divvied up over 2008, 2009 and the first two quarters of 2010. And that’s assuming Fox Interactive Media makes its minimum targets – both companies believe the upside will be far greater.

“eMarketer estimates that US social network ad spending will rise to nearly $1.9 billion in 2010, from $280 million in 2006. With the Google/MySpace deal, ad revenues at MySpace may top $1 billion as soon as 2010.”

But while the social networking opportunity is being monetized, the relationship between two Web 2.0 poster children and the thoughts of an influential business professor suggest companies considering how they can participate must consider “three Cs” if they want to master the opportunity: core competence, Consumer Generated Media and controversy.

MySpace has demonstrated that it has discovered a formula for attracting and holding the attention of an extremely distractible, and highly desirable, demographic. But it has not yet developed an e-commerce platform to generate revenue from its audience’s interaction. Enter Google, which is constantly finding new applications for its Web 2.0 competence in managing complex data. Uniting the competencies of the two entities could create a new model for online transactions.

Aho Williamson points out that: “New products such as Google Local and Google Checkout are crying out for an audience and MySpace could be a convenient place to give them a big push: Local businesses could offer a seamless way for MySpace users to find their retail storefronts using Google Local, or they could simply handle online transactions with MySpace users by using Google Checkout.”

As for Consumer Generated Media (CGM), John Deighton, Harvard Business School Professor and an expert on interactive advertising, provides an interesting perspective. He was interviewed by the Harvard Business School’s Working Knowledge newsletter about the deal, and sees MySpace as “a really exciting marketing frontier.” For one reason, the utilization of CGM means that it can continuously remain linked with the needs and interests of its audience: “MySpace will evolve with its users. It relies on user content, so this is bound to happen. As member tastes grow up, so will their profiles.”

With concerns about online predators targeting MySpace users, one can’t mention social networking without noting the controversy it attracts. Deighton suggests that advertisers not be scared off by this concern, and even sees it as part of MySpace’s appeal: “It is popular precisely because it sits between safe-boring and truly frightening. I don’t think News Corp really minds MySpace’s racy image.”

There is no doubt that social networking can be monetized. But the companies that do so must have a competence in managing content in Web 2.0—in this case, harnessing collective intelligence and handling a complex database—know how to build a business model around CGM and be willing to handle the controversy that can be involved.

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If you spend any time on the Internet, you will have at least a passing interest in blogs. But if you’re responsible for communicating your corporate message and managing your advertising budget, you need to be using this social media actively. Recent statistics demonstrate that blogs are an extremely cost effective way to reach an influential audience at a fraction the cost of traditional media vehicles.

The phenomenal growth in the number of blogs has been well documented, and recently released statistics from comScore Media Metrix, demonstrates that this explosion in content has driven a corresponding increase in usage. They report that the traffic to blogs continues to grow, up 56% over the past year to 58.7 million visitors, and that represents 34% of the total Internet audience.

 As with many Internet-related trends, a younger demographic plays a key role in driving the numbers. Users between the ages of 12 and 17 are 21% more likely than average to visit blogs.

However, certain blog niches (like politics) have a median age of 45 and median income of $85,000, and a high level of C-level executives.

Effective blog advertising

The stat about blog niches was provided by Henry Copeland, president of blogads.com, in a discussion with B.L. Ochman on MarketingProfs.com. According to Copeland, the appeal of this new media has driven a 300% growth in blog advertising in the past year. He adds that, if used well, blog advertising can allow companies to establish significant brand awareness for as little as $25,000 to $75,000.

The article makes a strong case for the importance of utilizing blogs for corporate marketing, and provides a number of useful examples about how the media can be used to achieve spectacular—and cost effective—results. But it also cautions that advertisers must adopt a blog mindset it they want to succeed with blog advertising.

“With click-through rates in traditional online advertising dropping, inexpensive blog click-throughs are as high as 1%,” writes Ochman. “Advertisers are starting to appreciate the influencer constituency on blogs, where the distinct advertising value of these audiences ‘isn't their eyeballs, it’s their mouths,’ Copeland says.

“Successful blogs are edgy, have a sense of humor, and are recognized experts in a narrow niche. Blog audiences look at traditional ads, like ‘Click here, get 20% off,’ and say ‘screw this, I've seen it everywhere,’ Copeland says.

In his discussion, with Ochman, Copeland offers the following guidelines for effective blog ads:

Effective corporate blogging

Given the significance of blogs for on-line communications, every company should be incorporating them into their communications mix. Not only is a corporate blog an inexpensive way to deliver information, best practices in corporate blogging have become obvious and are easy to apply:

• Establish your credibility as an expert.
• Know your target audience, connect with them and engage them.
• Use an informal, conversational style.
• Keep your information real and relevant.
• Provide links.
• Respect your competition.

Microsoft provided a high profile example of the benefits of corporate blogging with Robert Scoble. His blog attracted millions of readers and his departure captured mainstream media attention. For instance, in its coverage of Scoble’s move to a video blogging start-up, Forbes.com wrote that: “To err is human, to blog, divine? For the last three years, one man has shown how a blog, plain-spoken and irreverent in its tone, could be a tool to significantly help soften the monopolistic bullying image of a corporate giant like Microsoft.”

Scoble epitomized the practises mentioned above, winning praise for himself and his company. He was clearly an expert who connected with his tech savvy audience, wasn’t afraid to respect Microsoft’s competition—praising nemesis Google, for example—or to criticize his own company. As a result, writes Forbes, “industry watchers came to appreciate both Scoble's honesty and his inside look into the traditionally insular world of software development.”

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For a consumer preparing to spend a substantial portion of her household income on a family vacation, travel is about finding the right experience for the best value. For the business providing that experience, travel is about standing out in a hyper-competitive, global market while maintaining a sustainable margin. For both parties, travel has also become about mastering the Internet, which these days means immersing themselves in the emerging world of Web 2.0, notably the deep respect for data and the collaborative creation of content.

It’s well established that travellers rely on the Internet to make their plans. For example, in its North American Consumer Technology Adoption Study, Forrester discovered that US online leisure Bookers research across an average of 3.2 sites, plus one offline resource, to plan their trips. But in an age in which Intelliseek reports that consumers are 50 percent more likely to be influenced by other customers and individuals than by traditional advertising, travellers are increasingly using the Web to engage in a dialogue with one another about their trips.

“User-generated content has exploded over the Internet, and, from blogs to Wikis to MySpace, real-life user commentary is trumping established media and brands,” writes Matt Rand in Forbes.com. “Travelers have taken to the Web and are now providing real-time, illustrated, no-holds-barred travel guides.”

The online travel industry, which has reached sales of US$60 billion in revenue, or about one-quarter of the overall US travel market, has recognized the importance of these trends, and as a result provides helpful examples of how to incorporate the technology and mindset of Web 2.0 into their business plans:

• A new generation of travel search sites have stolen a page from the Google Web 2.0 playbook, and perform meta-searches to offer comparison-shopping pages that aggregate pricing data from many retail sources. Unlike the travel agent sites like Travelocity, the meta-search sites include every airline and travel-booking agency, including Orbitz and Expedia. Kayak, for example, features the slogan: “search with us, book with them.”  As interesting as the model is, however, Forrester reports that these sites owns less than 5% of all online travel.
• The industry offers an interesting deployment of a wiki to assist with travel planning, World66, a site on which everything is written and edited by random visitors.
• Social networking has become one of the most talked about Web 2.0 phenomenon, and the travel industry has a numerous examples. FlyerTalk, for instance, features thousands of posts from frequent flyers who are helping one another, trading discount certificates and swapping customer experiences. The established travel players are attempting to participate in this Web 2.0 world. Starwood, for example, created a new blog, TheLobby.com, and invited the Starwood Lurker, who had become a celebrity on the FlyerTalk community, to address hotel issues.

While these examples provide a good reference for any company contemplating how to incorporate the mindset and technology of Web 2.0 into its strategy, Yahoo! demonstrates how organizations that develop a competence with CGM can enter new markets and pose a significant threat to incumbents.

“With features like Yahoo! Shoposphere, an add-on to Yahoo! Shopping that gives users a chance to make lists and guides for others, Yahoo! is tapping into its 400 million users to create content and foster communities that will keep the Web traffic flowing,” notes Rand. “In addition to reviews and photos from Flickr, the service includes a trip planner, where people can create itineraries for trips that other users can then vote for in Yahoo! Travel’s listings if they like the trip plans.”

Reiterating the point that Yahoo! sees travel as being a market that requires Web 2.0 technology, it bought travel meta-search site FareChase in 2004 which enables users to check fares while looking at reviews and trip planners.

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If anyone doubts that content is king on the Internet, they have obviously been ignoring the rapid emergence of Consumer Generated Media (CGM). Whether a company has built its business model on content creation and dissemination, or selling deodorant, it must incorporate an understanding for CGM into its web strategy.

Not that getting it right is easy.

The New York Times reported that, after proclaiming grand plans to bring elaborately produced sitcoms, talk shows and other television-style programs to the Internet, the head of Yahoo’s Media Group, Lloyd Braun, is sharply scaling back those efforts. He said the group would shift its focus to content acquired from other media companies or submitted by users.

“I didn’t fully appreciate what success in this medium is really going to look like,” Braun a former Hollywood executive told the Times. “This is not about creating one-off hits like in my old business. That is not going to create a sustainable competitive advantage over the long term.”

His answer? CGM. “I now get excited about user-generated content the way I used to get excited about thinking about what television shows would work.”

In an article in CRM Magazine, Alexandra DeFelice provides a number of interesting case studies of major brands who are not only excited about CGM, they’re making it work.

For example, Kao, the manufacturer of Ban deodorant, created a contest asking, “What would you ban?” It generated roughly 50,000 website visitors, about 10 percent of whom entered ads they had created online. Nine semifinalists were selected and given promotional materials to try to get people to vote for their ads. Within two weeks, those nine individuals generated 150 percent more traffic than all the company’s advertising had in the previous few months.

“As consumers are inundated by ads, marketers will need to stand out by finding better ways to reach them. Simply put, companies must develop methods that are interesting and compelling to consumers,” writes DeFelice.

She also offers seven tips for fostering creativity:

1. Stay grounded, but consider alternatives. Alternate channels are a complement to other forms of marketing and rarely can be used as a standalone effort.

7. Think strategically. Don’t get caught up in cool ideas. Choose alternate channels that make sense based on your strategy.

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A common issue unites all companies, regardless of size and industry: there is never enough money to throw at every opportunity or threat. That fixed budget means investments in one area of the business come at the expense of others.

For Small and Medium Sized Businesses (SMBs), those budgetary decisions are especially difficult and visible. By definition, there’s fewer dollars available than in large corporations. And when there’s less than 100 employees and a relatively small customer base, it’s very apparent where resources are going and where they aren’t.

As result, investments are made in the areas that offer the most obvious return, and for many SMBs that is not perceived to be their website. Research indicates that 57% of SMBs are making money from their websites, either online or via offline sales. While it’s a growing percentage of revenue, it’s not yet reached the level where every SMB can quantify the benefits of investing in their website.

Every company can calculate the benefits of adding salepeople or investing in improved supply chain management systems, however, so it’s easy to understand why the website can lose out to other areas of the business.

This question of how to justify website investments was an important part of a seminar we presented to a group of business owners this week. Their companies ranged across a variety of sectors. Their websites, in turn, varied widely in functionality, content quality and visual appeal.

We reviewed ROI models that quantify the company-wide benefits created by a site that strongly links to organizational objectives. While each company worked with numbers that were unique to their business, there was one measure they all factored into their plans: 1/20^th of a second.

That’s the amount of time in which viewers judge your site, according to researchers in Carleton University’s Human-Oriented Technology Lab. They reached their conclusion by flashing websites for 50 milliseconds and asking study participants to rate them for visual appeal.

“Unless the first impression is favorable, visitors will be out of your site before they even know that you might be offering more than your competitors,” says Carleton’s Dr. Gitte Lindgaard. The research, which is reported in E-Commerce Times, suggests that the first impression forms an initital bias that dictates long-term opinions.

A positive first impression carries over to other features of the site, such as content. Since people like to be right, Lindgaard reasoned, they will continue to use a website that made a good first impression.

It’s an eye-catching stat, and one that certainly captured the attention of the business owners. While the benefits of a well designed site are difficult to quantify, the risk of creating a negative impression in a fraction of a second can be quickly understood.

And with that understanding comes an obvious justification for improving the design of a website.

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When you launch your web browser, are you engaging in civic-related communications? Or are you initiating a commercial transaction? Your answer may determine what role you would accept for government involvement in your online experience and what responsibility you believe corporations have for enabling your communications and transactions.

Why is this significant for web strategy? Because, in western democracies, we have the luxury of assuming that businesses and their customers will have guaranteed access to the Internet at a reasonable price. That assumption rests on decisions made by governments regarding how to regulate, or not, the Internet. It is also shaped by how the companies who create and manage the backbone of the Internet interpret their responsibility toward customers and shareholders.

In a high-profile example of what can happen in countries that lack our democratic tradition, we witnessed Google agreeing to censor its site in China. The move has been criticized, but not by Bill Gates, who defended his rival’s decision. Gates said that Internet technology contributes to political freedom and added that “I think [the internet] is contributing to Chinese political engagement . . . Access to the outside world is preventing more censorship.”

A recent article in The Nation, “The End of the Internet?” suggests we shouldn’t take inexpensive Internet access for granted in North America. The writer, Jeff Chester, states that: “If we permit the Internet to become a medium designed primarily to serve the interests of marketing and personal consumption, rather than global civic-related communications, we will face the political consequences for decades to come.”

People who launch their browser to participate in political dialogue will nod enthusiastically at this point, lobby their government for greater regulation and propose clear responsibility for corporations in enabling citizens to engage in free discourse.

Many, many more people, who use the Internet to research and make purchases, will roll their eyes, perceive no role for the government and expect corporations to be responsible for delivering better products at a cheaper price.

Chester’s article can’t be easily dismissed, however. For one reason, telecos and cable companies have a responsibility to their shareholders to deliver a return on their investment. To that point, he quotes Ed Whitacre, chairman and CEO of AT&T, who told Business Week, “Why should they be allowed to use my pipes? The Internet can’t be free in that sense, because we and the cable companies have made an investment, and for a Google or Yahoo! or Vonage or anybody to expect to use these pipes [for] free is nuts!”

For another reason, Chester points out that these large corporations are aggressively lobbying the U.S. government to enact legislation that will support their revenue goals. “Under the plans they are considering, all of us—from content providers to individual users—would pay more to surf online, stream videos or even send e-mail.”

An imminent threat? No, but it’s certainly an issue to include in your “environmental scan” as you assess your Internet strategy.

In the meantime, you can take in the ACLU’s projection of how web technology and rich data can turn a simple transaction, ordering pizza, into an interaction with Big Brother.

Oh the pundits are raving about Web 2.0 – the latest buzz phrase to describe the next generation of the Internet. In short, Web 2.0 is merely a catchy marketing phrase developed by a marketing company (O'Reilly Media) to label the next generation of the World Wide Web (best represented by new social media such as blogs, wikis, RSS, podcasting and social bookmarking).

Now every pundit and prognosticator who fancies themselves a leading mind is writing about and espousing about the virtues of Web 2.0 with many predictions and insights into the future of our online lives (and now, myself included J). Ah, so much hype

I will however spare you any predictions. I like the approach of my friend and fellow blogger Mark Evans who writes about his favorite Web 2.0 applications (Must-Have Web 2.0 Apps..and Some Much-Needed Pragmatism). Some of my favorite 2.0 applications include:

• Skype – who doesn’t like to VOIP?
• Technorati – the dean of the blogosphere.
• del.icio.us – social bookmarking site.
• My Place – the next generation of Geocities.
• Google News – news subscription service offered by the big G.
• Talk Digger – tracks who and what is being said about your web page, blog, etc.
• My Yahoo! – Yahoo! Has been around a long time, and so has its personalization portal My Yahoo!. However, RSS has revolutionized the personalized portal space and My Yahoo! Keeps getting better and better.
• Writeboard – a free wiki service. While I’m sure there are far better wiki solutions this one is free and I understand its limitations.
• Plone – a free content management system (CMS) platform. The next generation of Zope and open source CMS.

In addition to those apps, some other applications that Evans likes include:

• Pandora
• Omnidrive
• Blogbeat
• Firefox 
• Pingoat
• Qumana

As interesting as some of these new tools are, many won’t likely see profitability. They’re cool gadgets with little real business promise (sound familiar circa 1999… anybody remember the iSniff and the proposed Snortal?). Cool just doesn’t cut it in the absence of strategy and a defined plan.

 “The big problem, however, is too many of them have adopted a "build it and they will come" business model based on the idea that you attract a critical mass of users first and then come up with a way to generate enough revenue to build a viable business,” says Evans. “Unfortunately, this is a flawed premise because once you offer a service or product for free, it's difficult to get users to pay for it. Far too many Web 2.0 start-ups also seem to be relying on (Google) AdSense as the foundation for their businesses. That's fine if you're an enterprising entrepreneur hoping for a few bucks to help pay the mortgage but it's not the revenue stream to build a real business.”

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A new report from Nielsen/NetRatings adds to the quantifiable impact of blogging, in this case the ancilliary benefits generated by blogs. The organization reports that traffic to image hosting Web sites has skyrocketed due to the massive rise in blogging activity this year.

• As a category, image hosting sites have grown 406 percent to more than 14.7 million unique users since January 2005, accounting for nearly 10 percent of active U.S. Internet users.
• In July 2005, 20 percent of active Web users, or 29.3 million people, accessed blogging or blog-related Web sites, growing 31 percent since the beginning of the year.

While no business people (especially ones who derive revenue from digital images) would ignore these stats, they might question the applicability to business strategy when they learn that female teens between the ages of 12 to 17 years indexed the highest out of the age groups broken down by gender.

There’s an easy explanation for this demographic trend—social circles have moved on-line, web journals provide a great means for getting to know someone and teenage girls like to meet people—but companies that look beyond those demographic fine points will see the inherent power of the Internet as a social media and refine their Internet strategy appropriately.

The same social impulse that draws teenage girls to blogs sparks the mass collaboration that is capturing business interest and rewarding companies that learn to harness its power.

In a comprehensive article on the topic, Business Week, provides a number of statistics on how on-line collaboration impacts various industries, including:

• Telecom: More than 41 million people use Skype software to share processing power and bandwidth, allowing them to call each other for free over the Internet. Partly as a result, combined 2005 revenues of AT&T and MCI are expected to fall by $7.4 billion, or 15%.
• Media: Reversing the traditional broadcast model, more than 53 million Americans have contributed material to the Net, such as product reviews and blog postings. At least 10 million blogs, some drawing more visitors than mainstream news sites, are now read by 32 million Americans.
• Advertising: Search engine Google instantly polls millions of people and businesses whose Web sites link to each other, producing an entirely new ad venue that grossed $3.2 billion last year, up 118%. That compares with an 8% increase in TV ad spending and 5% in newspapers and magazines.

Mass collaboration challenges numerous business principles, notably the command-and-control structure instituted by most corporations. Not surprisingly, then, the early winners have been upstarts rather than established businesses.

Nonetheless, companies like Hewlett-Packard and Proctor & Gamble have tapped into the power of mass collaboration, learned to manage the social impulses of their customers and employees and generated solid business results through their efforts.

It’s a trend that all organizations will need to watch. Just like  teenage girls are discovering that image-intensive web journals are a great way to meet people, organizations that harness the power of mass collaboration are becoming very popular in their own social scene.

Yahoo! makes billions – but not from original content. Yahoo! makes money from other’s content by providing access to it – either by linking or aggregating.

Yet Yahoo! is hiring writers and correspondents to develop original content. Hot on the heals of hiring a roving war correspondent (see Content is king), Yahoo! announced the hiring of 10 financial news columnist

Why start hiring writers? Yahoo! is doing quite well thank you very much, but they know that content is king and are investing because that’s what we want. 66% of Americans with Internet access read online news on a regular basis. Purchases of pure content (think Wall Street Journal Online and others) is expected to top US$2 billion this year.

People love news. News is now the most read content on the Internet. Fueling the need for news is the news junkie’s heroin – RSS.

To review for those that still haven’t sampled the drug,  stands for Really Simple Syndication. A script that allows users to "subscribe" to content within a client – such as as My Yahoo! or Feedster – that aggregates RSS content feeds. RSS is often most associated with blogs, podcasts and news sites. This blog of course has RSS subscription options as well. With the number of blogs at 15 million and growing at a rate o 80,000 per day then it’s a good think we have something to help us keep track of all of it.

RSS is now being used by most major news sites and publishers including CNN, CBC, BBC, NYTimes.com, Amazon, etc. Even Microsoft is getting in on the game with plans to incorporate RSS in the next generation of Windows.

Surprisingly, most don’t even know that they are using it. A Nielsen/NetRatings survey this month of 2,129 online U.S. panelists showed that 83 percent of RSS users didn't realize they are using RSS. Nielsen speculates that people are likely signing up for customization services such as My Yahoo! without realizing that such features are powered by RSS.

Advertisers are now also heavily tapping into RSS. There are networks of blogs where an advertiser can buy a single ad appearing in numerous blogs. Ad-supported RSS feeds are now being offered by Yahoo! and WashingtonPost.com with marketers like American Express, Continental Airlines and Verizon. Just a few weeks ago Washingtonpost.com started putting ads in its RSS feeds.

Blogging is becoming a killer application that could rival e-mail’s impact on modern communications.

Yes, while e-mail still remains the quintessential killer application, some of its value is limited by the fact that once it’s sent and read (sometimes read) it’s often deleted and gone forever. A blog on the other hand can be archived, updated, edited, added upon and solicit and archive reader comments and additions.

Katrina provides an excellent case study of this muscle. Statistics reveal that blog postings of the name Red Cross increased by 10 to 20 times the normal amount to all blogs tracked by Intelliseek’s Blogpulse tool during the height of the chaos. Similar spikes were also seen at other not-for-profit organizations providing relief along the GulfCoast.

During this time of increased blog activity Nielsen/NetRatings statistics show that traffic at RedCross.org jumped massively. On August 31, 2005, Redcross.org jumped to more than 1 million visits – more than 32 times the average daily visits prior to Katrina. As of September 2, the site had raked in online donations through the website of $110 million – representing more than half of all the donations from all channels at the time.

One blog called TruthLaidBear.com, started a donation registration program tracking donations made by bloggers themselves. As of September 2, the site had tracked $430,203 contributors referred by 1,453 blogs (for a complete list of relief organization websites who accept donations see Fecal cholera death swamp).

Estimates show that there is somewhere in the neighborhood of 20 million blogs on the Internet. Tens of millions of people are reading blogs every week – many reading them daily.

This is the power of a killer application that continues to flex its muscle on a daily basis.