Empowering the Consumer

Yesterday at the Internet Venture Fair, Jonathan Miller, the Chairman and CEO of AOL gave the keynote speech.  It was a very well done presentation that clearly highlighted what's important for AOL.  One of the points made was about "empowering the consumer."  As opposed to the "walled garden" approach, empowering the customer means allowing them to embed all sorts of third party widgets, applets, and content on their web page.  As long as the consumers are happy, then they will be your distribution channel bringing their friends in and adding value to the overall platform.  That's the idea behind empowering the consumer and allowing third party products on your pages.

In theory this is fantastic, but I think we will see some limitations to how empowered consumers will end up being.  I asked Jonathan Miller this very question:  "Where do you draw the line in empowering the consumer, when some of the third party widgets may actually harm AOL and draw the consumer away from AOL sites?"  His answer was that AOL will be as liberal as possible.  In Jonathan Miller's words "it's not a good long-term strategy to get in between you and your users."  He gave the example of AIM pages launching with Flickr (which is Yahoo) as the photosharing solution and not the AOL photosharing solution.  Sounds good on paper but I don't think this will be the modus operandi going forward for most sites.

First and foremost, some widgets are designed by the company behind them to siphon traffic away from the site they are displayed in to another site where the widget maker makes money.  This is in effect, hijacking pageviews.  Today this may be a mere nuisance to AOL, but when some of the these widgets become popular it will become a problem.  After all, the battle is for eyeballs and pageviews.  The more pageviews you have the more ads you show.  Even in this blog you are reading there is a widget that hijacks pageviews.  It's on your lower right, entitled 'Tags'.  If you click on my tag cloud it will take you away from my blog into ZoomClouds where you will see their ads instead of mine.  If you click on the article it will bring you back to my blog.  This is a value added service to me, but annoying and the first that I will throw out when I find a widget that does the same without the hijacking.

There are other examples of more meaningful sites doing the same thing.  The first one that comes to mind is Ebay disallowing the use of Rapleaf in their product descriptions.  You can read more abou it here.  Rapleaf is a reputation engine that competes with Ebay's own.  Their reputation engine is one of Ebay's most prized assets and a global and independent reputation engine is a threat even though it appears to value to Ebay's users.  By the way, it turns out by the way that any link on a product description on Ebay that takes you out of Ebay is violating the EULA.  It wasn't enforced until now.

Another example is Myspace shutting down Singlestat.us.  It's a site that lets you know if somebody's status (single, dating etc.) changes.  It is a value added service to Myspace users, but the users pay Singlestat.us and not Myspace for it so they had them shut down.  You can read about it here.  This is an example of getting in between you and your users.

Myspace did the very same thing to Datinganyone.com.  You can read it on Techcrunch as well.  So there are cases where if you are taking traffic away, or delivering value the site wishes to deliver, or if you are making money by delivering the service, then you can be shut down.

So we can all talk about "empowering the consumer" but when push comes to shove we will see less and less of it.

Comments

[Mark Brooks]

Singlestat.us seems harmless enough, but Myspace is fighting a PR war right now. The press are highlighting the dangers of stalkers on Myspace citing numerous malicious incidents. Myspace appointed a security officer recently. He's keeping busy it seems. See below.

fyi, there's actually an internet dating convention dedicated to background checks and safety coming up July 13-14th. I'll be keynoting.

Mark Brooks
editor, onlinepersonalswatch.com

http://onlinepersonalswatch.typepad.com/news/2006/04/myspace_hires_h.html

MySpace Hires Head Security Officer

Myspace_16NEWS CORP.'S INTERNET COMMUNITY SITE -- Apr 13 -- MySpace hired Hemanshu Nigam who was previously the director of consumer security outreach and child-safe computing at Microsoft. Myspace is consolidating a number of duties; outreach to law enforcement, overseeing site security and user safety. Myspace is deleting profiles that include "questionable material" (200,000 profiles), and is reviewing 2 million images a day. It has also launched a series of online public service announcements on its own site as well as other News Corp. properties, warning users about online sexual predators. "1 in 5 kids online is sexually solicited. Online predators know what they're doing. Do you?" FULL ARTICLE @ MEDIA POST

[Kevin Dewalt]

I totally agree. Consumers, of course, want to be able to plug in whatever tool they want from whatever company. But consumers don't always get what they want.

We would all prefer the option of buying paperbacks on the day a book is released, but publishers want the margins associated with hardback.

[Balaji]

Baris,

I don't agree with your argument totally. There are three kinds of widgets that can be plugged into your website. 1) New service, 2) Competitive service and 3) Annoying service

I guess you are talking about the second part - "competitive service" and a little bit of third part - "Annoying service".

Rapleaf is obviously a competitive service for ebay and it makes sense for eBay in not allowing that. Likewise, Singlestat.us is an annoying service for Myspace (in terms of traffic), but not competitive enough that Myspace can very well do that. So they shut them down. Similar case with Datinganyone.com too...

But if think about a new service widget planted in other websites, there are numerous. Starting with Google box placed in affiliate websites, to the tagcloud placed in your website .. everything is a very good service that people like to have in websites. While these companies cannot establish their business alone (except Google), they do provide a real good service that users like. So I believe collaborative effort between different companies will provide a great user experience. It's not possible for a single company to do everything. Either they should buy other companies, or they should collaborate with their services. Think about Youtube videos and flickr photos and photoloop photos placed in different blog websites - users just love them. But it is not possible for typepad or blogger.com to have these services on their own.

Having said that, I believe if a company can establish their services standalone and then expand in collaborating with existing websites, then they could be successful. Also, if a company cannot establish by themselves, but always depend upon other websites, then they need to have a strong compelling new service and needs virality to get into the market .. kinda tough though !!

[Engmet]

Baris,

I agree with the previous comment. Just because clicking on a tag brings you to another site doesn't mean it's hijacking IMHO. What do you get after clicking on a tag? A list of articles from your blog that bring you back right to it. Sure, there is adSense on the side, but more often than not, the cloud takes your user to zoomcloud then back to your site. It's a collaborative effort as the previous comment pointed out.

On top of the cloud you display around 12-14 small subscription boxes. They too take you to another site. In fact, if I add your blog to my, say, Bloglines, what I'm doing it bringing your content to a page that Bloglines later may pack with ads and in fact it will keep me away from your site unless I wish to leave a comment. Yet, we all show those subscription boxes without hesitation in our blogs.

The eBay/Reapleaf issue is somewhat different. While one's within eBay's reputation system, eBay is saying "this is what we believe in, because it's within our control". By letting users use a 3rd party reputation system, eBay no longer can say "this is a trustworhy system, you're free to use it". In fact, I myself wouldn't price too high a good reputation on Reapleaf - it is after all a new system that has to prove itself before it can be trusted. eBay gives me that. I can hardly compare this with the tagcloud or the subsciption buttons "hijacking".

My opinion, of course.

[Baris Karadogan]

Engmet,
I agree with a lot of what you say. In the case of my blog, I have no other way to syndicate, so I am more than happy to have refer people to bloglines. Same with zoomclouds, I have no way myself to write code (though I used to be a software developer long time ago) and create a tag cloud myself so I let them do it for me in exchange for letting them show some ads I'd rather show. In this case, hijacking may be too harsh a word, since they are adding value to my product.

But what about sites who have the ability to write the code if they wanted to? Doesn't it makes sense for them to find out what the most popular widgets are and then write them themselves so that they won't lose any pageviews? Wouldn't sixapart perfer me to use a widget they are promoting as opposed to a third party widget I find? I think down the road big destination sites will figure out what value is being delivered by third parties and either do it themselves or if it affects their business materially turn them off.

In the Rapleaf example, let's do a though experiment. If Rapleaf becomes reasonably popular and trustworthy, say if Craigslist adopts it and it's used extensively there, the question is do you think Ebay will let them back in? I doubt it.