Milestone Group Blog: Thoughts on the Tech Industry

Recently, I had a chance to sit in on a Digital Media session at the Asia America MultiTechnology Association conference. The panel was led by Mark Stevens of Fenwick and West who did his usual masterful job of teasing out some interesting tidbits from his panelists. They included Tim Kendall the Project Manager of Facebook's recently botched Beacon introduction, Yoon Lee of Samsung, David Richter of DivX and Chris Corvalho of Lucas Films.

Needless to say there were a variety of views represented. They ranged from US and Asian cultural differences that help explain variations in consumer electronics adoption rates, to snide remarks about how this coming CES will once again be the year of the Digital Living Room - something that seems to be a continuously moving target.

Although I found some of these topics interesting, the real morsels of insight came from several points made by Tim Kendall of Facebook. These provided a few key signposts of how we may see Facebook evolve as it attempts to monetize its 58 million users.

Tim kicked off with a relaxed apology for the Beacon privacy debacle, echoing some of the points made by Mark Zuckerberg in the press recently. As he said in his mea culpa, "Beacon may go down as Facebook's biggest screw up." He hoped this was the worst mistake they ever make. They certainly learned a lesson from it. You might think this would have damaged Facebook, but so far it appears to be mostly a PR gaffe. As comScore Media Metrix recently reported, Facebook had 20M visitors the week of Beacon’s announcement and 22 million for each of the two subsequent weeks. It then rose to 25 million the week of November 25^th. We’ll see how the December numbers shape up.

One of the key points Tim made was how Facebook will evolve from a community site to a community that you can take with you as you travel the web. Imagine for a minute, as he explained, that you’re a member of the Facebook community. You decide to go to Netflix to pick up a video, say, Tom Cruise in Top Gun. When you land at Netflix you identify yourself with a Facebook ID. Then before you finalize your selection, you decide to see who else in your community has seen the film and what they think of it.Hmmm, more context, more relevance, more ad dollars. Repeat across multiple websites and presto, you have some serious incremental ad revenue.

So "If the mountain won't come to Muhammad, Muhammad must go to the mountain.” Or in Facebook’s case, if we can’t squeeze enough dollars out of our site alone, let’s take our revenue generation engine to the places where we can monetize the community to the hilt.

I’ll follow up in another blog entry or in an upcoming Milestone Group Quarterly with a discussion of 5-6 other key initiatives that Tim talked about. In the meantime, let us know what you think.

Author: Chris Kocher