Category Archives: Internet

Why Foursquare is better for Local Businesses than Groupon

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While Groupon has redefined local business and is in news for its fastest billion dollar revenue + its $700 Mn IPO, from a long term perspective I think Foursquare is a far better bet than Groupon.

Some of the many criticisms of Groupon –

  • Socially unconnected users
  • Concerns on validity of Business Model, just 3 years and now a IPO
  • Merchant side issues – 75% discount on products
  • Not much metrics available for merchants, no user contact information
  • Are new consumers acquired or are they deal seekers only
  • No technology barrier, 100s of Groupon clones have hit across the Globe
  • Though not many players are as large as Groupon, LivingSocial; Merchants have a choice
  • Intensive feet on street business with huge sales force.
  • Groupon Now – merchants are able to create own deals through Groupon

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Take case of Foursquare – they could possibly over throw Groupon.

My contention is that any platform and service that can empower merchants to run business and acquire consumers (new/repeat) will be able to overthrow Groupon in long run. While Groupon clearly demonstrates that local deals work, Foursquare has the technology & product to take it to the next level and give a tough competition to Groupon where it hurts most – at supply side (Merchants or Local Business Owners).

The biggest ‘cry’ we hear against Groupon is merchants complaining – its only the existing customers who use Groupon coupons for deals, and new consumers are not acquired/retained.

On the other hand, Foursquare –

  • As a product, consumers checkin at all locations and businesses (small, local & large)
  • Foursquare need to move beyond check-ins for two reasons
    > In sometime real consumers (not technology savvy early adopters) will not find value in badges & points.
    > Foursquare will need to have a monetization model that works!

Foursquare has valuable insights about users for the merchants – people who have checked in. They just need to quickly enable self-serve platform for business owners with a global sales footprint.

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Foursquare can just topple off Groupon and with its solution for merchants that covers every pain they have with Daily Deals services like Groupon, Living Social and 1000 others only for one reason – Business owners know who are new/repeat customers

  • They can enable deals for individually and for specific type of customers
    > Consumers who check-in for first time
    > Repeat & Regular customers
    > Consumers who have not checked-in since last 30 days
  • Decide what deal goes live when based on user interest, inventory available, and so on

More than that, they can –

  • Decide how much discount they should offer. To whom.
  • Take private feedbacks from customers on service
  • Push deals to customers on special occasions like birthdays & more
  • Pass on details about business Facebook & Twitter presence to customers – so that they can stay connected.
  • Analytics – who checks in, cost of acquisition of new customers, competition overview in same location

And most importantly – Foursquare should give ability to businesses to generate coupons, pass on to consumers in vicinity or existing customers which users can redeem immediately.

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In short – daily deals websites exploits local merchants. Foursquare can empower them!

The pitfall – Foursquare does not have a global sales footprint to enable this. Though technology savvy merchants back in US might adopt it, the business would scale when 1000s of merchants across the world are able to enable it. But again, thanks to the 8 Mn+ users – Foursquare already knows which businesses are popular and when they should start.

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If I had a million dollars and choice to invest in Groupon or Foursquare – i would surely bet on Foursquare!

My Prediction – Groupon or some player who has intention to venture big in local deals space will eventually acquire Foursquare or a majority stake.

Isn’t it time to re-look how TRPs are measured?

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This post is dedicated to John Wanamaker, credited for setting advertising standards and considered by few as father of advertising. John Wanamaker died in 1922. Had John lived today – he would have some interesting quotes to share on RoI in digital advertising.

This post is inspired by one of his very famous quotes – “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

The term RoI became a buzz word ever since Digital advertising started to gain prominence in last few years. Talk to any brand manager today on digital spends through any channel – Search, Social, Display or Email – his quick conclusion on effectiveness of any campaign will be based on ROI.

Pitch any campaign today on Digital – both Brand Manager and the Digital Marketer sound no less than a Investment Banker trying to advice its client on a multi-million dollar deal discussing on its investment, profitability and more. The same Brand Manager or Media Buyer will simply look at TRPs of any channel/program and allocate about 50% of its media spends to Television, distribute a significant chunk between Outdoors, Newspapers, Radio and leave a minuscule 5%-10% to Digital.

Well, this post is not about how Digital Medium today is perceived as ROI driven, this is very unlikely to change in coming years. The question to raise is – isn’t it time to re-look how TRP ratings are measured rather than blindly accepting the reports as provided.

First – to know more about what is TRP and how they are measured using people meters – read this excellent post on Television Point.

For those who have not seen a People Meter – here is one below:

credit: image source

Here are some questions usually asked about the authenticity of TRP ratings –

  • In India – TRP People Meters are installed only in 16 cities across 9 states; Less than 10,000 people meters are installed  –  would they be good enough to reflect insights on Television Viewership of a country as large and diverse in demographics & culture as India?
  • There is little or no transparency on number of households with People Meters installed, techniques of data collection & interpretation, and how the data is extrapolated to whole population. Are there any validations if the meters were correctly operated and data collected the way it should have been?
  • People Meters were always perceived as expensive devices since invention; with advancements in technology – why have the People Meters not proliferated to a wider reach.
  • Is there any control by Government authorities on collection of this data and authenticity of same.
  • How will any marketer, advertiser or broadcaster challenge authenticity of the weekly TRP ratings released.

And in world of digital economy, let me add few more questions to above arguments –

  • Now people are socially connected through social networks, it is very difficult to spot people who mention they have subscribed to People Meters.
  • On Google’s image global index – there are not many images when you search for “people meter”.

In todays world anything that happens in offline world leaves a footprint online. Absence of digital footprint for “people meter” wants me to question the proliferation of such devices in real world.

The DTH Effect –

Direct-to-Home (DTH) or Satellite Televisions are today immensely popular amongst masses. In India – its reach is 20 Million households in 2010; and India is expected be the world leader in DTH subscriptions. 20 Million would be a better representation of viewership data – compared to the dismal < 10,000 people meters installed by TAM in India.

aMap works with DTH service providers – but it is unlikely to capture data across all subscribers and might be following the people meter approach. Brand Managers are believed to be more inclined towards TRP ratings provided by TAM for decision making while aMap ratings are for reference.

Its most unfortunate if DTH platforms are unable to track viewership data. Thats like Air Traffic Controllers saying – there are 500 planes in skies today – we are unaware of their origins & destinations, can confirm with pilots only when they land.

TRP Measurement – Its time to Change!

Fundamentally – People Meter approach will always be poor representation of the population. As spends on digital media start increasing and reaches a critical mass, sooner or later TRP measurement will be questioned by same decision makers who accept it blindly today.

Fortunately or Unfortunately, the future of TRP & GRP measurement is digital. Existing global players like Nielson, TNS, & others involved need to look beyond people meters and embrace the medium.

Here is overview of how possibly TRPs will be measured in digital world –

  1. Develop applications across digital channels – Internet, Mobile (Java, iOS, Blackberry, Android, Symbian and others)
  2. For every location (geo by country / location) – populate information stream of programs currently broadcasted at that time.
  3. Allow users to select the programs they viewed and report the same back to the measuring system through the applications.
  4. User demographics will known at time of App-Registration.

There are ways to authenticate user viewership patterns. Instead of focusing on data collection through people meters, with same efforts & resources – it will be possible to crowdsource viewer-ship data for programs and channels across millions of users – all in real time.

Future Prediction – by the year 2022 (exactly 100 years after John Wanamaker died) – people meters and traditional TRP measuring practices will be obsolete. They will be measured through digital medium! John Wanamaker would have proudly said – “Thanks to Digital, I know exactly which half of my advertising money is wasted!”

Absolute Selfish self-promotion –

I future-gaze based on trends in consumer internet, user acceptance of technology innovations and its impact on lives of people.

My thoughts on Future of Television have been well received and acclaimed by a few users who took notice. Beyond which I have no expertise/experience in Television Domain.

Search Engine Optimization or Traffic Hijacking

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Search Engine Optimization or Traffic Hijacking – What really goes on Page 2, Page 3 and beyond…
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With online advertising getting more and more driven towards performance based metrics – the ways to channelize affiliate marketing for performance have taken some interesting turns – and no one is taking a notice of this. Online marketers seem to be so focussed on just numbers through its media partners and not really on how they are achieved.
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So putting ahead here a case with its example which I discovered today. Right or wrong – I will leave it for someone else to judge! – but this might be true for many brands in India.
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But for the fact – delivery of some performance based marketing is getting blurry. It looks more like attempts of good SEO techniques exploring more than what they should have since Online Marketers are have not yet noticed it. This might be controversial – but eCommerce services and mostly travel (OTAs and Airlines) companies may be paying up some performance marketers for just no reason.
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Example – Jet Airways
There are significant number of searches for “Jet Airways” and related searches everyday on Google and other search engines. The most valid websites that user would expect are – of course www.jetairways.com or www.jetlite.com – and then there are list of websites which are without any doubt not owned by Jet Airways – that appear on Page 2, Page3, and beyond.
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Here are few of them are listed below, each one of them uniquely optimized for related search terms consumers will use while they are searching for “Jet Airways” –
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The above listed web sites are just few of the many – I did not explore much. One look at most of them – and you will realize that are built to get free extra revenue through display advertising and affiliate marketing.
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So why should a brand like Jet Airways (or your brand) worry about –
  1. Loss of Traffic
    The above websites are SEO optimized for search queries related to Jet Airways. No doubt they are ranked well, hence receive significantly higher traffic – which originally should have been received by Jet Airways website by default (in event this websites were absent).

    These websites are so well optimized that they might be taking about around 20%-30% (or more) of traffic that was meant for Jet Airways itself.

  2. Loss of Revenue
    Loss of traffic also means loss of revenue! No further explanation here.
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  3. Paying from its Pocket!
    Many of these websites are running affiliate tracking codes (mostly for Jet Airways itself) – which means indirectly Jet Airways is paying affiliate commissions for this diverted traffic originally meant for them. Are such affiliate cookies kept live for a longer period (say 30 days)? Imagine the loss of revenue.
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  4. Loss of Brand Value
    Frequent internet users directly reach destination websites, unsure how a normal internet consumer will react to this or if loss of brand value can be attributed. I landed on one of such websites today – first reaction – “What happened to Jet Airways website today?”
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So whats the big deal…
Instances mentioned above can be termed as traffic-hijacking through SEO – originally meant for the brand; but routed through another destination and then asking the brand to pay for it!
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SEO is all about playing with Google rankings – Google’s job is done when they show first 1-2 results accurately, the next results are optimized to rank better. Building such optimized landing pages by product companies like – Ixigo, Cleartrip, MakeMyTrip, Yatra, ezeeGo1, goIbibo etc should be fine – as in any case these websites clearly have a business model and have a service to offer directly to consumers.
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Disclosure –
Jet Airways is not singled out here in this post. I am a frequent flyer with Jet Airways (part of JetPrivilege for about last 5 years) and personally very satisfied till date with its services. The above example stands true for many leading Airlines and OTAs as well.
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Takeaway…
Are you a consumer facing brand in India – Google search your brand name and view each and every search result of your first 100 rankings!

Username or Email Id – Just figure it out

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Naukri & Monster, I respect both – as a service and as a product.

They both must have (and continue to) contributed to careers of many people in India. Awesome products – though I always wished their search worked better. This post is not about search – but how even big and highly used products overlook simple usability and product management basics.

Have noticed this repeatedly and wondered – why do both (Naukri & Monster) provide option to users for selecting login credentials between username & email address? Isn’t it really simple to decipher on-the-fly if the details entered by user is/is-not a email address – a email address will always contain “@” sign or a “.com” or some domain suffix?

Other critical mistakes –

  • Naukri – Homepage just missed out in labeling and pointing out the Password text-box completely. Although, it is a web standard that after Login text-box the next logical text-box is for Password; Don’t recollect seeing any other website which has taken this assumption for granted.
  • Monster – Why not provide users options to login from its homepage itself rather than taking them to different page to login. It is consumer service, or is Monster not expecting frequent repeat usage.
Takeaways – Don’t over look the basics.
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Daily Deal Aggregators – what is your business model?

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Deal Aggregators – what is your business model?
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Movie 300 – One of the most inspiring scenes, when King Leonidas asks his army – Spartans, what is your profession?
watch it here – http://bit.ly/4csyEj
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Post the series of daily deal sites that have come up in India (or across the world) – there are many deal aggregation services that have been launched. There are on going debates – is there a business model for deal aggregation services?
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While daily deals and coupon services are growing in India and else where – many users/customers of daily deals services as well as critiques of this business models have complained that people usually end up buying things that they do not want or would not have purchased otherwise. Which is little illogical because you buy it for the deep discount – and you buy it by your choice.
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My example – I am a regular eCommerce transactor – at least 10-12 product/books (non-travel) transactions per year. However I am yet to buy a deal/coupon as most services are offering deals that are not relevant to me or not close to my location. As a consumer, here is my take – I will not be interested in a coupon that gives me Rs 200 off at a restaurant in Andheri (Mumbai). The economics does not work for me, total travel time of 4 hours, commuting cost between Rs. 100 to 500 depending on mode of travel and accessibility of the service provider.
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There are two primary needs of consumers in this space that are not yet solved completely:
– Relevance of the Deals
– Location of the Deal
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While this is the problem that most daily deals and coupon services are themselves trying to address – the aggregators can do a better job at this for following reasons:
  • Most deal sites are limited to anywhere between 1 to 5 deals at any given time. That limits their reach to about 5-10 suburbs in a city like Mumbai (Mumbai + Navi Mumbai + Thane) or Delhi (Delhi + Gurgaon + Noida)
  • A deal aggregator can get such 5 deals from 5 different websites – and will have 25 deals to showcase and in most cases the span of reach will be wider – about 20-30 suburbs (which covers 40-50% of Mumbai)
The above statement is very logical, however deal aggregators now have to think beyond just aggregation and focus on distribution of such deals to relevant audience – relevancy by deals and location. At least in India, it may not be the daily deal websites that can take this business hyper-local but definitely the deal aggregators can if they wish to.
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If deal websites are focusing on – Deals in Mumbai; aggregators should focus on Deals in Andheri, Bandra, Chembur, Colaba, Ghatkopar and more!
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My two cents – Business model for Deal Aggregators should not be aggregation of deals. That is a simple job and that is minimum expected out of them. Your business model should be Distribution – distribution of deals, thats where they start testing their capabilities and adding value to the ecosystem!

Social Commerce is Simple

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Social Commerce is Simple. Here is how you solve it in 24 hours!

The Context of this post: Have been hearing & participating in some awesome conversations lately about Social Commerce. Someone explained me this – Transactional eCommerce is Big. Social media is where all users are today, it is already very Big.

So, Social + eCommerce = Social Commerce = Very very big!

Hence there is lot of interest today in products and platforms that are trying to bridge the gap. Analysts are predicting that its the next big thing and stating it is reaching its inflection point.

Completely agree with all that. But Social Commerce is simple, here is how you solve it.

Social commerce is Simple

View more presentations from P J.

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Oooops, btw did I tell you that more than $50 Million has been invested till date to solve this Social Commerce problem that merchants can do it themselves in less than 24 hours!

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The following text is not included in above presentation.

Some key insights for players in Social Commerce:

Existing ecosystem of eCommerce and Social Media is sufficient for building a Social Commerce without intermediation of players who do not add any value.

It will be difficult for a:

  • Existing social player to exploit potential of social commerce by introducing a new ecommerce service
    (Facebook or Twitter trying to build a Amazon)
  • Existing ecommerce player to exploit potential of social commerce by introducing a new social service.
    (Amazon trying to build a Facebook or Twitter)

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Most current players who are trying to build solutions are concentrating on building their own ecosystem of users & products – which is not impossible but extremely challenging. Reason being – such players do not own the products or the users (users that have more tight social connections as on Facebook & Twitter)

Unless a third situation happens – someone builds a valuable middle layer that provides affinity to both – social & commerce. As an platform in this case you need to provide enough value to users (either users from Social Media or users from eCommerce).

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One such promising player is FourSquare. They add a new value of – “checking in” to its users that are socially connected. Their current efforts are concentrated on getting these Social Connections to checkin to venues – which is demonstrated by its 6Mn+ users.

For purpose of this presentation I have kept other Social Models out –

  • Foursquare: Because its reach is still 1% compared to Facebook’s 600 Million users.
  • Groupon: It is a commerce player, but not social player. Groupon is not user engagement – view Fred Wilson’s comments here: http://t.co/p78buu0

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Drop me a mail, Available for Coffee and endless Product Management Conversations on weekends 🙂

Twitter Business Model – 8th Wonder of the World

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Twitter – the microblogging platform that revolutionized social media. Tons of businesses today are revolved around the tweetoconomy (tweet economy) – right from developing applications, social media agencies, and so on.

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While it might be an billion dollar economy that revolves around twitter and social media today, unfortunately Twitter still is trying to evolve its own business model. My argument here is that although the Twitter ecosystem is valuable, its going to be very challenging to monetize it. Twitter may have some business model (as it now has – promoted tweets, trends and users) but it will not justify the investments made in Twitter and the valuation it has today.
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And discovering that business model which justifies the valuation & investment may be as good as finding the eighth wonder of the world. Here is why:
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Twitter ecosystem consists of three factors:

  • Users – who tweet
  • Tweets – the 140 character messages which users write
  • Applications – all applications that allow users to write these tweets

All other functions of twitter – search, trends, lists, etc are functions of these 3 factors.
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Twitter has 175 million users; 75% of all tweets are outside of Twitter website and about 40% of them from mobile devices. Growth of twitter was propelled by three factors:
– Acceptance by celebrities and big brand names, which lead their followers to come on-board twitter
– Twitter became a pet of mainstream television and offline news
– Widespread development of applications by developers across the world. The twitter API was easy to implement and build quick apps, many innovative applications where built by developers which would have taken twitter ages to come out with.
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As per twitter website, as of Sept 14 2010 – there are a whopping 95 million tweets a day. (Imagine the monetization Google will achieve with 95 million search queries!). However most tweets are irrelevant; according to a research report by Pear Analytics – 40% tweets are Pointless Blabber, 38% are conversational, 9% have pass-along value, 6% are self promotion, 4% are news while rest 4% are spam.
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Tweets get a very little attention span. A study did by Sysomos revealed that – 71% of all tweets generated get no reaction – 23% get replied  – 6% get re-tweeted.
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The life-span of a tweet is another big issue – and every tweet gets a fractional life-span before it gets lost on tweet streams. To put it simply, fractional tweets are seen, more fractional tweets are read and even more small fraction of them are responded.

The life-span depends on factors like
– number of followers you have
– % of followers online at that time
– rate of tweeting of people followed by your followers at that time for them to notice your tweet
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Twitter’s Business Model

Few months back – according to internal documents leaked and published on Techcrunch, Twiiter was expected to reach an revenue of $140 million for 2010. The documents were leaked in 3rd quarter of 2009 – post which Twitter launched its 3 business offerings – Promoted Tweets, Promoted Trends and Promoted Accounts.
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Was Twitter referring to these 3 offerings to generate an revenue of $140 Million. In that case assuming 33% contribution towards revenue generated for each of them, they have to generate $46 Mn per year – at rate of $125,000 per day.
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Thats very expensive! Should twitter be charging $125,000 per day for these offerings? The answer to this question may surprising be Yes!
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Reports mentioned on sites like Clickz, Mashable, Wall Street Journal, The Next Web, Read Write Web – and many others have indicated that costing of promoted tweets is upwards of $100,000 per day!
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Such high costs are not justified as the business model is still not proven. Advertisers paying for these should be aware that these features are mostly available on twitter.com, while 75% activity on twitter happens outside of Twitter through applications and mobile devices. While there is no or very little context and relevance in which these promoted tweets, trends or accounts are served.
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Twitter’s ecosystem cannot be monetized!
Twitter’s ecosystem may be valuable, but cannot be monetized! Here is why was we summarize each of its component.
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Tweets:

  • Most tweets are blabbers, pointless
  • Most tweets do not have any intent like search keywords, and even if they have any intent – it will be momentary.
  • Most tweets are meant for others (for followers). Finding intents specific to self may be difficult task.
  • An user’s tweet can be completely different than his previous one – hence establishing relevance or context and validating seriousness of that context is not possible.
  • If Twitter is able to build an killer-product that deciphers user’s intent and in real time shows and advertise to the user, the only relevant format in which advertisement can be displayed to user is by tweeting a reply. This will lead to tweet-spam and users will protest!
  • Is the advertisement will include a link (of say ecommerce website) – chances of users to complete a transaction may be very less. Visitors from Twitter are known to have highest bounce-rates with a huge majority of users not exploring beyond 1-2 pages.
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Trends:

  • Trends are collective tweets of a large set of users. Most of the times trending topics are consequences of large offline news events and big announcements made by brands, companies and individuals (celebrities)
  • Its understood by commonsense that a promoted tweet may not cause same impact amongst users as a natural trend. The viral factor in a natural trending topic will be 1000X of promoted trends.
  • If twitter continues with promoted trends – at a costing of $100,000 per day – this model is not scalable and will not appeal to small segment of advertisers
  • Its not even possible for Twitter to monetize natural trending topics as they are usually related to subjects or topics that cannot be monetized. Twitter cannot predict a trending topic; and for an current trending topic which has potential to be monetized, it might be difficult for them to get find an advertiser before the topic stops trending.

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Users:

  • Most followed Twitter users are celebrities or big brands that have pulled more users to Twitter. Twitter will not have been at this scale without such users.
  • Twitter will continue to offer featured users and verified accounts for free, they may not be a business model here.
  • Promoted Accounts is being offered without much reference to user’s behavior or interest. Hence there may be little value to businesses for ‘promoted accounts’ to gather users to whom their tweets may not be relevant.

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Applications:

  • Twitter has indicated it will not allow applications to monetize tweets
  • Twitter cannot charge application developers. With 75% tweets coming from applications, Twitter is more dependent on them.
  • If Twitter starts monetizing individual tweets, they will also need to credit the applications that completed the monetization action.
  • While there are few benefits associated with applications like Quora to integrate with Twitter; stand-alone twitter applications will also need to have a way to monetize. If they are not able to monetize and generate revenue by themselves or through Twitter – they may start loosing interest in building or maintaining applications for Twitter..

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Twitter’s Speculated New Business Models:
Business model speculation and criticism is not new for Twitter. There were reports that Twitter may be be coming up with an eCommerce or News related business model. Here is my take of them:
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eCommerce:

  • There are few tweets shared between users about product recommendations, purchases and reviews. Tweets work in an open environment and Twitter may not be able to add more value to such conversations that are already happening.
    Example., if Dell continues to generate millions of dollars revenue through Twitter, there is not much Twitter can do to get a share if that.
  • In event if Twitter is forcing upon some business model related to eCommerce on to large brands on-board, there are multiple small accounts that will continue to converse as always. A business model that cannot be expanded to cover all its users equally will not last for long time.
  • Twitter itself is not an eCommerce seller like Amazon and can never be one. Neither can it act as an affiliate

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News:

  • Twitter is used by meaning leading publications and individual users to break stories. Once the story is pushed to twitter – its responded by followers, a huge story ends up becoming a trend and initiating conversations.
  • The process of publishing a twitter, spreading to follows, building conversations over it happens in a very short span of time. Twitter by itself is not a news service, any attempt to be in this domain will mean competition from well known and well followed media organizations. For a user – he is still very happy with the existing news publishers on Twitter.

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Concluding Remarks:
Twitter has always remained in the spotlight and seems like raising more capital is not a problem for them. For the fact that VCs have invested over $360 Million, Twitter is surely bound to give their investors a good exit and their quest of finding an business model will be going on for some time.
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Right now, its not clear if Twitter is or is not under great pressure to show an convincing business model, but some point they will have to. Twitter team is no doubt struggling to find a revenue model that fits its ecosystem – an ecosystem which has value for its users but is extremely difficult to monetize for the company that owns it.
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While Twitter is not ready to accept proven online business models like search and display, Twitter’s discovery for its revenue stream will be as good as finding the eighth wonder of this world!

Twitter Business Model – 8th Wonder of the World

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Predictions – Biggest Exits in Indian Internet Space in coming years

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There would be multiple Consolidations, Mergers, Change of Strategies by lot of VC-invested companies by 2015.
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Product based eCommerce companies:
Lot of interest seen in recent times by VCs. LetsBuy, Snapdeal, FashionAndYou, Flipkart, and so on, Infibeam as well (though still not part of any portfolio yet). Future of eCommerce companies will depend completely on two factors:

– Internet penetration in India > 200 Mn by that time
– Improvement in eCommerce transactions (Infrastructure + User Comfort)

The rate at which investments are made are much higher than rate of growth of both the factors mentioned above – which in a way may be good – as all invested companies will act as catalyst in growth and get new set consumers on-board.

If we see an IPO exit for atleast one of product based eCommerce companies that will be awesome;  One or Two VCs in India (without naming any here) have been actively investing in eCommerce space. There may be a very high possibility that they may merge two or more portfolio companies to form an large entity, which may be just a good acquisition target for Amazon or an IPO exit.
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Group Buying companies:
Was surprised (like many others?) with GroupOn‘s decision of acquiring SoSasta. There are established players in Group Buying space, I’m sure GroupOn has seen some merit and synergies. For existing leading players like SnapDeal, Deals and You and Taggle – they will continue to grow and have to.

Possible exit for them will be Google (since they are starting with Google Offers) or an acquisition by eBay; or maybe GroupOn India may now want to expand presence with one more acquisition. Not to forget that LivingSocial will also come knocking. Now that eBay has ventured into Group Buying space – it has much higher accountability as deals are now served by eBay and not marketplace. eBay India may acquire someone if they decide to have an experienced them to execute this business vertical.

Expect one very large player to enter Group Buying space in next 1-2 months, if well executed – in all probability it may give tough challenge to current market leaders.

Unfortunately many small players will hit the dead pool (few of them have already) due to execution challenges, expansion costs, and lack of operating revenues to keep going as the model is very easy to replicate, but not easy to scale with thin-margins and high acquisition cost.
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Online Travel Companies:
Clear IPOs for Yatra & Cleartrip. Will be great exit for all invested players. GoIbibo and ezeego1 are also leading players in travel domain – Goibibo’s exit may depend on ibibo’s overall plans, ezeego1 may raise capital through markets directly bypassing VC route.

Redbus is promising, they are very high on number of transactions – ticket size may be lower compared to Airline tickets, but % margins will be definitely higher. In all probabilities – Redbus may too hit an IPO or will be an acquisition target for Yatra or Cleartrip (listed travel companies by then as MakeMyTrip has acquired Ticketvala)

I hope someone in Indian Government thinks of the opportunity of listing IRCTC on stock markets.
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Ticketing eCommerce:
BookMyShow will expand to more geographies – they have presence in Malaysia & New Zealand. To get to more such markets, they will require more capital – further investment and definite IPO candidate. Reliance ADAG is trying to make it big in entertainment through BIG – they might knock doors.
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Technology Companies:
Pubmatic (industry’s first yield optimization player) may get acquired in few years. It faces good competition from AdMeld & Rubicon Project, however none of these yield companies are focusing on small publishers (the long tail) which may be the key to larger success.

iYogi by all speculation is IPO bound. Slideshare is leading in its segment and may be a great exit story. Fusion Charts is another one that may be acquired for technology and customers; and so is Martjack.
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Advertising Networks:
Existing players – Tyroo, Komli, Ozone Media, AdMagnet and others. Do not forecast a immediate exit for these players – the number of players in this segment has been same for long time (no new entrants) – and otherwise too existing players seem to looking outside of India, are they hinting saturation of market? The frequency of acquisitions of pure advt-networks has decreased outside India (no big news in so many months?).

There is no distinct advantage over each other and offerings (if Vizisense is treated as product outside of Advt-Network). Would have been great to see an situation like AdMax Network (owns up majority market share in countries they operate – very tough competition to Google as they have leveraged on local language audience which is majority).

Google has played a flattener by opening up its unlimited inventory on Doubleclick exchange through Google Certified AdNetworks program. Post which the publisher development story may have taken some hit, but wondering why have not the Indian Advt Networks integrated on Google’s Doubleclick exchange yet – expand you publisher network!

InMobi which is now the largest mobile advt network (outside of Google/AdMob) – maybe one of the biggest exits through Nasdaq IPO. There is no immediate need for Google to buy another mobile advt network – that leaves IPO as only logical exit unless AOL, Yahoo or Microsoft realize that they haven’t looked at the mobile monetization business seriously.
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Matrimony Portals:
BharatMatrimony (Consim Group) would be going for IPO in coming times. Not aware of any investors in Shaadi.com (although there are in Mauj & Fropper), if business is profitable and there are no investor pressures – unlikely to see an IPO from them (at least before BharatMatrimony).

Read somewhere that Jeevansathi has abandoned markets in South India (not sure of this), however its already a part of listed InfoEdge group, spin-off very unlikely as numbers are reported as part of InfoEdge.
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No Clear Exits:
SMS GupShup, Guruji, mCommerce companies (PayMate, mChek and others) are few companies I am not convinced of having an clear exit strategy. (Someone do throw light on this)
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Promising Startups:
The next wave of promising startups in India will be product-driven companies. Although the eco-system to fast acceptance of technology products is not so strong right now – it will be in coming years. Emergence of interesting start-ups like Practo, Zaakpay, Grexit, emo2, Workasaur are first steps in that direction.
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Hoping to see many success in next 5 years! Best Wishes
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This opinion was posted originally as an answer on Quora at: http://www.quora.com/Which-Indian-internet-company-will-have-the-biggest-exit-by-2015

Why LinkedIn should acquire Quora

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Quora has seen unprecedented traction in last few months on 2010 and bound to be an one of the most talked about startup for 2011. Here are few reasons what makes Quora an perfect candidate for acquisition by LinkedIn.

1. LinkedIn is a network of professionals – however much activity is centered around initiating business contacts and building your professional resume/network.

2. LinkedIn tried getting into having its users into groups and eventually discuss, debate on topics within the community – if you are an expert a mere “recommendation” by colleague is emphasis of your performance at a particular role or organization. Recommendations always centered around – great team player, leadership role, knowledgeable, etc – but users were not able to demonstrate their expertise, opinions on to a common forum with industry leaders/ participants.

3. LinkedIn community features (like status updates) are mostly feed-into by Twitter or applications like Foursquare. Professionals will not share expertise without being asked for – Quora has questions, and hence ability for professionals to demonstrate their knowledge.

4. LinkedIn Groups have repeat questions – the perfect answer may be in some different group which is not discovered by the person asking the question. Quora has solved the discovery puzzle for users. I manage an 8000+ group on LinkedIn, the quality of answers on Quora are unmatched to those on LinkedIn. The issue is not quality of people, they same are on LinkedIn, issue is how to get those quality Questions & Answers discovered or re-used.

5. Other players – Twitter, Facebook, etc are more social and so is the content shared – status messages, pictures, links, etc. The level and quality of questions that are asked and answered on Quora will not fit within the Social Norms established by Twitter or Facebook.

Nevertheless Quora also has challenges like going beyond the web-startup community, dealing with self-glorifying users that at times add irrelevant answers to grab attention, highly prolific users with right expertise flooding user stream that overshadows other users, questions with multiple answers but few getting maximum votes causing difficult in discovering other relevant answers, and so on. These are good challenges to have and will only test ability of this product.

If LinkedIn has to acquire Quora, rather than integrating the same within LinkedIn as an component it should –

– Allow Quora to grow independently on its own

– Allow LinkedIn profiles to be linked with respective Quora profiles

– Build an rating/ranking system that allows determination of user’s expertise on subjects/topics based on crowdsourced feedback on user’s questions / answers / comments

– For LinkedIn users, show an Quora expertise quotient in subject/topic user has participated.

The great thing about Quora is its well maintained quality of questions and answers. The next great knowledge resource is Wikipedia (but in encyclopedia format). If Quora has to be independent it will grow in a Q&A’pedia; if not LinkedIn is best fit for professionals to demonstrate their expertise

This opinion was posted originally as an answer on Quora at: http://www.quora.com/Who-is-most-likely-to-acquire-Quora

Why Indian Languages Failed to make a mark Online!

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Why Indian Languages have failed so far to create much desired impact on Internet?

With due respect to companies & entrepreneurs working in Indian /Indic languages – let me put practical thoughts on Indian Languages proliferation in Indian Online industry. Technology is nice, great infact – we love it when we type in English and the text gets converted to an Indic language. Technology does makes us say – WOW!, but it is not enough to assume that millions of Indians will adopt it and it would bring about an revolution in Indian Internet Industry.

Revolution in Indian Internet Industry will be when about 100Mn Internet users in India grows to 500Mn (not in next 20 years, but in next 3 years) & about 1XX Mn Mobile Internet users grow to 500 Mn (not in next 10 years, but in next 2 years). Hope the revolution of this sort does happen – but will acceptance of Indic languages lead to it – answer is definitely NO! The ecology for this change is simply non-existent in India today; and is far from created.

Having worked in the Internet domain – we have repeatedly heard that Indian languages to be the next thing. These predictions actually looked more like “me-too” product offerings – thats worked-in-US will work-here-too. Because China has Baidu does not mean we need one!

Coming back to Indic languages, in my opinion – the languages space has been highly misunderstood. We saw several efforts in this direction over years:

  • Rediffmail introduced feature to send and receive emails in multiple Indian languages many years back. However the usage of this service is not more than 1% of overall service. Ajit Balakrishnan, CEO, Rediff.com said earlier – “Lets not assume that (Indian) users want Indian Languages!”
  • Microsoft started offering its Windows Operating System and MS Office Suite products with Indian language versions since last few years. The adoption rate of same is questionable – to my best positive guess it will be still <0.5% of overall installations.
  • Keyboards / Input devices with multi-lingual keyboards were at one time were hailed as innovations to drive computing to rural India.
  • Indian fonts also saw its own best days when they were introduced to the market.
  • Bi-lingual (English+Hindi) mobile phone keypads were once a rage. Nokia introduced a series of phones and around same time we saw a huge interest in mobile applications working on Indian languages

Most of these services/launches were well received, were thought and perceived to be game changers. Maybe at times even I did think in same way – but while I have studied this space and have interacted with few wise people in Indian & International scene – Can strongly put forward the conclusion that Indian Languages will NOT make a mark in Computing, Mobile or Internet domain. It will not happen very soon – the ecology for such change to happen in India does not exist.

Here are of fews considerations that makes me form such strong opinion and conclude on absence of ecology favoring Indic languages adoption:

Diversity of India:

While this is what makes us proud of India – this is one of the strongest reasons why Indic languages have failed to make a mark.

Consider emerging markets like-

  • Brazil: Over 99% of population speaks in Portuguese
  • Other Central & South American countries like Argentina, Venezuela, Peru, and many other countries have Spanish as the official language with over 90% population in these countries speaking in Spanish.
  • Similar with French – it is widely accepted in many European countries as official language.
  • Consider China – it is as diverse as India, but all most popular versions of Chinese languages are based on standardized version of Mandarin (based on Beijing dialect)

Consider India – while Hindi is leading official language, but no single language has adoption across the country. State governments have endorsed respective regional languages as official, Hindi failed to find the common ground – but English did!

How Innovation starts in Local Language:

Take market like China – The innovators, the early adopters, the influencers, the decision makers, the entrepreneurs – all of them DON’T KNOW English!  So innovators developed softwares, websites, products in Chinese; early adopters used Chinese products and so did the influencers, decision makers, and everyone else in China.

Take India – we know our Mother Tongue (our Mother Tongues are different) + we know English!

English is Aspirational language!

English is an aspirational language. Nothing official about it!

It can be confidently said that the percentage of users who will read/write/speak English language will keep growing for next 50 to 100 years. The same cannot be said about Indic languages.

How new users are learning computers:

For applying to government jobs that involve computer related work, few state governments in India have provided guidelines / benchmarks or minimum criteria based on examinations/programs acknowledged by them. Once such program with examination is MS-CIT for Maharashtra Government.

Had a chance to visit once such center – the communication with students may be in local language – however many users prefer to give examination in English language and during their classes learn computers that have English versions of Windows / Office and other software applications.

Indian languages are complex; Do not follow standard / global script:

One of the most favoring factor for languages like French, Spanish, Portuguese, etc was the fact that they followed alphabets from English language (ABCD…XYZ). No additional fonts, hardware or input devices were required to be created when uses adopted computers usage in these languages – both reading and writing.

In contrast, all languages in India do not follow standard script and are very complex to input and still be grammatically correct. To a small extent, another disadvantage is – like English we cannot drop vowels (AEIOU alphabets) to make shorted and communicable form of any Indic language, an convenient SMS lingo of Indic languages could not be developed.

Even Devanagari script is very complex to be standardized for its multiple languages on a input device like keyboard; even if it were – all languages in India are not based on Devanagari; while in China most Chinese languages have standard Mandarin script.

Internet was built on Content; Indic languages lacked adoption by early movers:

Internet was built over years – the most popular activity till date on Internet has been creation & consumption of content – through content sites, social content, or services & products that communicate through a content (language). While content was created in other global languages based on English alphabets from early days of Internet – it took a long time before content in Indian languages started appearing on Internet. By the time ability to create content in Indian languages was available – English had taken a mighty lead in its adoption as Internet’s mother-tongue for India.

In early days of Internet in India, most early adopters had English as first/second language. It made more sense for these users to adopt English language than create content in Indian languages as content was readily available elsewhere to. Most early and popular Indian websites too focused on creating content in English.

Even if they were to adopt Indic languages – the question will always be – which one to start with?

Indian Languages are great for Consumption; Not for creation!

As users we consume all regional languages through other Media – Television, Radio, Newspapers. Its very easy to consume on traditional media and the ecosystem exists for – content (TV programs, news content, audio content for radio), publishers (multiple TV channels, news papers & radio stations) and advertisers (promoting products in Indian languages). There is huge amount of content produced, audience availability & consumption, and advertiser interest.

Indic languages are great for consumption; not for creation! Ask yourself –

  • How many times have you sent an official email in Hindi? No business may deny communication in lndian language if it gets you more business – but did you send?
  • How many times have you sent an email to an friend in any Indian language?
  • How many times have you composed and sent (not forwarded) an SMS in Indian language?
  • You may talk with your friends in any language – like Hindi, Telegu or Bengali – but did you write email to them in that language?

No Rewards for creating Content for Publishers

Even if large publishers now take efforts to create content in local language – the cost & economics associated with this may not justify the efforts. The questions to ask would be –

  • Is there audience that would accept content in Indian language. If there is – are they online today?
  • Are advertisers willing to include these in media buying plans, develop creatives in multiples of Indian languages – would the right advertisements be displayed to correct audience?
  • How will they get traffic? How will they optimize for SEO? If they post an message on their Facebook fan page – will the users reply back in local language or in English?
  • The monetization – how will they?

Monetization for local language content publishers:

Should we charge consumers to access our content in local Indian languages – that will not work. The debate if content should be free or paid has been ongoing since we have known – its best concluded that content should be free as it has been.

Coming to online advertising opportunities, agencies and publishers need to take extra efforts if they have to cater most of the Indian languages – the time and effort required in doing so may not justify the returns on many metrics.

Even current large publishers like Yahoo, BBC, etc having local Indian versions of its service – feature display advertisements in English itself and have comparatively less advt spots than their English versions. Many small and medium publishers will rely on Google Adsense for revenues – but Google does not do any wonders here. No robust technology available to content sense Indian languages – and even if it were available – there are no advertisements available in languages to match up and show them in relevance. Fill rates for advt-spots would been lower and with fewer revenue generation options – small publishers will think twice before putting efforts on creating Indic language content.

Take a look at large portals in Brazil, France, Spain or China – the ecology exists with an huge array of content providers, publishers and advertisers communication through respective local language.

Literacy Rates of India:

While most predictions about Indian languages are made that it will increase penetration of Internet users in India – we forget to acknowledge the fact that there still exist an huge population that is illiterate. Unfortunately, 35% of world’s illiterate population is in India.

As of 2007, India’s youth had literacy rate of 82%, while that of Chinese youth was 98%. Literacy rates are based on an individual’s ability to read and write, not on his ability to understand or use computers! Hence the addressable Internet market in India for any language will be far lower than the entire population.

Our Generation is learning to give up Indian Languages:

Few factors around us might be making us give up our inclination towards Indian Languages. One of the strongest is influence on Cinema / Bollywood – Indian audience is bombarded with promotions of movies close to its release date, most promotions today feature names of Indian Movies in English characters!

Did you notice that – Ghajini, Dabangg, Golmaal, Rajneeti, or many latest blockbusters from Bollywood came out with posters/promotions focusing with name of movie only in English (or Hinglish). And so are television programs and contests .

While sending SMS’s even to our friends – its easier to type a local Indian language in English (Hindi + English = Hinglish), not just for Hindi but for all languages.

We are slowly learning to give up Indian Languages when it comes to usage on Mobile or Internet.

The Litmus Test for Indian Language Usage !

Amitabh Bachchan on KBC (Kaun Banega Crorepati) asks viewers a question for winning 1 Lac, users are expected to send SMS KBCQ followed by options A, B, C or D.

One fine day if he declares that only SMS in local languages will be accepted. How many users you think will send the answer as  (केबीसी क्यू क, ख, ग, घ)  or any other local Indian languages? Will there be a SMS responses go up or fall drastically?

For a simple message like this – there will be multiple variants in multiple languages.  Try composing this on your phone in Hindi or in your own mother-tongue. Now – Did you get my point about Indian Languages?

Concluding Notes:

There is definitely a pain area that has to be addressed here knowing the potential that can be unleashed will be tremendous. The challenge that needs to be addressed is not about creating a tool to translate content to Indian Languages or simplifying the creation in Indian Languages – but it is about creating an ecology that enables creation, consumption and monetization of Indian Languages!

Notes from above article:

  • Indian languages are based on complex scripts – it may be easier to read content, but not to create it.
  • There is no common ground for one Indian language – hence English takes a lead and will continue to.
  • Although there are technology innovations that lets one type in English and then auto-translate in a local language – but the minimum criteria to use the same is knowledge of English!
  • For Indian languages – it would definitely be the Mobile Story! Mobile Penetration in India is already about 50% of entire population – is the rest 50% a addressable market is questionable – even the new mobile operators in India have to prove themselves.

But with Indian youths – 82% literacy rate and high mobile penetration already are key factors. A solution for proliferation of Indian languages usage needs to be out before English becomes the De facto communication medium and an lost opportunity for Indian languages!