Travelin' Blues

On the road this week, posting alas will be light.

• Posted by John Battelle at 4:47 PM
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MSFT YHOO

I love Kara's take on Microsoft merging with Yahoo:

But that’s kind of like stitching together Bill Richardson and Dennis Kucinich and getting a potential front-runner for the Democratic presidential nomination.

Maybe with some Yankee determination, the two will make it happen. But I kind of doubt it. Microsoft has a lot on its plate just making aQuantive pay off this year...on the other hand, Microsoft kind of needs it...and so does Yahoo..

• Posted by John Battelle at 12:49 PM
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Zuckerberg Transcript

Thanks to Gary for pointing me to the transcript and video of Mark Zuckerberg's 60 Minutes appearance. So far the response (at least from comments here on Searchblog) is not overwhelming.

• Posted by John Battelle at 7:26 AM
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Memo to the Writers Who Want To Start Their Own Company

Guys, it's a great idea. But don't make the same stupid mistakes your bosses made and claim you need $30 million to do it.
Did it cost $30mm for Ninja, RocketBoom, WebbAlert or Diggnation to make serious money? Nope, it did not. Don't take VC money and fail. Do it smart, lean and right on the web. In short, don't do it in a packaged goods way. Do it conversational.

Update: I know that these guys want to make traditional movies, but there are so many new ways to finance movies as well. You don't need to finance the company to the tune of $30mm to do it...

• Posted by John Battelle at 2:30 PM
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The Size of the Domain Market and Other Stats

I've always been marginally fascinated by the domain marketplace (key companies include Oversee.net, Name Media, Demand Media), it's not an area I've studied closely, but clearly, it's booming. I'd like to get to know it better, in particular as I prepare to give a talk to a massive gathering of folks in this industry later this month. So in the spirit of "my readers are smarter than I am" I'm asking for your help - where can I get good information on this market? I'd like to know its size, growth, issues, etc. I am already doing research on it, but figured if anyone knows, you all do...

A few things I'd love to know with some authority:

- Overall size of the market

- What percentage of traffic is "type in"?
- How do majors figure in the business - do they endorse, ignore, partner (I know Google partners...)
- How much of the domaining business revenue is Google Adsense?

• Posted by John Battelle at 10:50 AM
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Curtain Rasier on Zuckerberg's 60 Minutes Interview

Beacon will be a "really good thing." In so many words, I agree. If...If...If....

PS - note to CBS, make the videos easy to embed, please...

• Posted by John Battelle at 8:45 AM
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Please, Don't Make Me Yell

Google has no reason to buy a Yellow Pages company. Does it? I've railed about this before, the sourcing at British newspapers is nearly as bad as second class blogs. Listen to this little bit of sourcing gymnastics:

The Independent newspaper in the U.K. reported today that a ``market source heard talk of a 500 pence-per-share bid'' for Yell by Google. Spokespeople for Yell and Google couldn't be reached immediately to comment.

Jesus. And I woke up and thought that Google might buy Circuit City out of Chapter 11, so I printed it.

• Posted by John Battelle at 8:44 AM
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Computational Advertising

I think humans are required anytime you want to connect a brand with a person in any kind of meaningful way. But "computational advertising" is one way to optimize that connection, for sure. This talk by Yahoo's A. Broder does look interesting (via Greg).

PS - Greg is starting at MSFT next week. Great hire, and congrats Greg!

• Posted by John Battelle at 8:23 PM
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More on MSFT and Fast

Gary has a timeline on FAST deals, showing the companies reach into enterprise search. Recall my earlier posts on how I am seeing this as a very interesting area powering new search UIs for consumers (against structured databases like the NYT articles, for example.)

• Posted by John Battelle at 2:14 PM
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Facebook on Data Portability: Wait and See

It's a first step only, as expected. A comment send to me from Facebook:

We are committed to giving users control of their data on Facebook and, at the same time, safeguarding the privacy of users. Facebook joined the DataPortability Workgroup in order to actively participate in industry dialogue and to represent feedback from the Facebook community.

- Ben Ling, director of product marketing for Facebook Platform

• Posted by John Battelle at 1:32 PM
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Mahalo Stats

Hitwise has some interesting insights.

Mahalo receives most of its traffic from Search Engines (76% last week) and sends most of its traffic to Entertainment (37%) and News and Media (19%) websites. Visitors seem particularly interested in games websites such as GameSpot, IGN Cheats and Game FAQs and News and Media websites, in particular, Google News and other online news sources.

Mahalo is gaining momentum slowly but surely.

• Posted by John Battelle at 1:11 PM
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New CEO At Ask

Jim Lanzone, who ran Ask since April 06, is stepping down and figuring out what's next while EIR at Redpoint. I'll be talking to him later today, update here soon.

Jim Safka has been named CEO of Ask.com. Effective immediately, he will oversee Ask.com's global operations. He will also continue in his role as CEO of Primal Ventures, a new-venture entity that identifies seeds and incubates business opportunities for IAC.

Mr. Safka, 39, served as CEO of Match.com from 2004 to 2006.

• Posted by John Battelle at 1:06 PM
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Yikes. Old School Media Is Hurting

I read I Want Media each day, and these were the first four headlines:

Time Warner May Cut 1,000 Jobs Due to Strike
McGraw-Hill to Cut 611 Jobs; More May Come
Martha Stewart Said to Lay Off More Staff
Chicago Sun-Times Reduces Size, Cuts Jobs
Seattle Times Plans to Cut Its Work Force

Holy cow.

• Posted by John Battelle at 8:25 AM
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TV Companies as Web Content Distributors: Don't Blow It, Guys

It's happening. While at CES today and yesterday, I spoke to two different manufacturers of HDTVs who plan to launch, or have already launched, televisions that are RSS enabled. In other words, the TV manufacturers are getting into the web content distribution business. Can you taste the convergence? I love the idea that my favorite RSS feeds might be running over traditional packaged goods content from the TV Networks, and there is nothing they can do to control it. I love the idea that we, as consumers, can take back control of the screen, and what is on it.

I only hope that the TV companies don't try to pick what content I want to watch FOR me. Oh, wait, that's what they are doing - Panasonic and Google are hooking up to connect Panasonic TVs with the Internet (Panasonic would be the third one, then, that is connected itself to the Web, and in essence, becoming a PC). Well, at least, YouTube and Picasa. I hope that's not ALL we can connect to....

• Posted by John Battelle at 5:00 PM
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Readburner

This looks really cool. Via Mashable, which has a good writeup:

Readburner is a site that has been playing at the edges of my feeds for several weeks now. I think I vaguely remember submitting my linkblog to a developer a month or so ago. He had said he needed a pile of linkblog submissions while he worked on an experimental aggregator based around Google’s Shared Item functionality. I saw a shared item in one or two of the linkblogs I subscribe to that ended up pointing back to a directory on an Amazon EC2 server.

Then Louis Gray wrote a couple articles, letting the cat out of the bag that there was indeed a project underway to finally fulfill the longstanding wishes of MG Siegler (and a great number of other folks like me who are avid Google Reader users). Yes, Virginia, there is a Google Shared Items memetracker, and its name is ReadBurner.

• Posted by John Battelle at 4:34 PM
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Wow. Facebook Must Read Searchblog!

I'm kidding, but last week (and several times previously) I lectured Facebook to open up, and predicted it would. Today, Facebook (and Google, but we'd expect that) have joined the Data Portability group. What I cannot figure out yet is whether this really *means* anything other than, well, they joined a group. But it's a great first step.

From my post on January 4:

With one move, Facebook can change the face (sorry) of this debate by making it falling-down easy to export your social graph. And I predict that it will.

Why? Because I think in the end, Facebook will win based on the services it provides for that data. Set the data free, and it will come back to roost wherever it's best used. And if Facebook doesn't win that race, well, it'll lose over time anyway. Such a move is entirely in line with the company's nascent philosophy, and would be a massively popular move within the ouroborosphere (my name for all things Techmeme).

Compete on service, Facebook, it's where the world is headed anyway!

• Posted by John Battelle at 4:25 PM
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Microsoft Acts FAST

Very interesting indeed. From the Journal (my linking mechanism is down at the moment, I am traveling):

Microsoft said it plans to buy Norwegian data-search company Fast Search & Transfer for 6.6 billion Norwegian kroner, or about $1.2 billion. The offer is a 42% premium to the target company's most recent closing share price. Fast Search & Transfer's board of directors has unanimously recommended the offer, and shareholders representing 37% of the outstanding shares have accepted it.

• Posted by John Battelle at 9:43 AM
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Wikia Search Is Up

I have not played with it much, but I wonder why it doesn't make more use of all the Wikipedia pages?

Link

• Posted by John Battelle at 7:57 AM
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Prediction Markets at Google

Fascinating. The set up:

At Google, employees are encouraged to go online and place bets on a prediction market — an exchange that tries to forecast events based on the money wagered on a particular outcome.

Prediction markets have been used for years to predict things like elections. At Google, they are used, of course, for business. In the last two and a half years, 1,463 employees have made wagers with play money (Goobles, as in rubles) on questions like: will Google open a Russia office? will Apple release an Intel-based Mac? how many users will Gmail have at the end of the quarter?

The pay off:

According to the report, “Using Prediction Markets to Track Information Flows: Evidence From Google,” which was presented Friday at the American Economic Association meeting in New Orleans, the strongest correlation in betting was found among people who sat very close to one another, trumping even friendship or other close social ties.

This is tangible evidence, the authors argue, that information is shared most easily and effectively among office neighbors, even at an Internet company where instant messaging and e-mail are generally preferred to face-to-face discussion.

Link to the report (PDF download)

• Posted by John Battelle at 10:08 PM
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Wikia Search

The Times' piece on the launch is up.

“We want to make it really clear that when people arrive and do searches, they should not expect to find a Google killer,” Mr. Wales said. Instead, people who use the Wikia search engine should understand that they are part of the early stages of a project to build a “Google-quality search engine,” Mr. Wales said.

• Posted by John Battelle at 10:05 PM
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The New Yorker on Google's Ambitions, Policy Issues, Etc.

Far ranging piece, still reading it, by Ken Auletta, who I spoke to for the piece.

• Posted by John Battelle at 9:28 PM
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The Ouroborosphere On Speed

A fascinating movie comprised of 50 hours of the Techmeme homepage condensed to 50 seconds, from Amit. You can't help but wonder what might be learned from the patterns unfolding in front of you, I want to see more!

• Posted by John Battelle at 11:35 AM
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It's Time For Services on The Web to Compete On More Than Data

The recent kerscobuffle around data portability got me thinking out loud about what the value of a social network really is - and by extension, any service that might claim to have "lock in" around our personal data.

For years now, a core (unresolved) issue in the Web 2 world has been data portability - with most of us - including me - arguing vaguely for the right to take our data where we want, when we want, without undue interference from the service that helped us aggregate it.

As the debate deepens, it seems there are two camps - first, the camp that says Facebook has either A. a right and/or B. an economic necessity to create a walled garden for our data. The second camp argues that Facebook - and any other walled garden - is A. Stupid or B. Greedy or C. Both.

I think I've been pretty consistent in my support of the less-than-nuanced second group of campers.

But I'm not entirely sure the debate is framed correctly. It assumes the key question is about whether or not the data can be ported. Instead the real value creation of a service is what that service allows a person to *do* with that data, once it's found its way there.

To frame the discussion, think about the idea of competing on the lowest price. This has always been a major point of pain in retail commerce - how can I compete on price if my costs of goods sold is the same (or, shudder, *higher*) than my competitors? My answer is to change the game: Don't compete on price. Compete on *service*.

An example. My local market charges far more for a good bottle of wine than many shops that are nearby. But there's a wine guy who works at that market who knows wine cold, and who I trust. Also, the market is close to my home, and I have a personal relationship with the fellow (OK, here's the reference to the book I'm working on - I have a "conversation" going with this merchant). Those factors, combined with a certain ambiance at the store that I really like, all lead to one result: I buy my wine at the more expensive store. Why? Because the store competes on more than price.

It's time that services on the web compete on more than just the data they aggregate.

I think the data portability crowd is driven by this idea, in the main - once we have real data portability, personal data becomes a commodity, and services then live or die not on data lock in, but on *service* lock in. Imagine a world where my identity and my social graph is truly *mine*, and is represented in a machine readable manner. Were that the case, the entrepreneurial opportunities to create second order value are immense.

Is this the goal of Open Social? I'm not sure. Danny has pointed out how Google is of two mouths when it comes to the idea.

The problem is, no one seems ready to truly set the social graph free. Till now.

With one move, Facebook can change the face (sorry) of this debate by making it falling-down easy to export your social graph. And I predict that it will.

Why? Because I think in the end, Facebook will win based on the services it provides for that data. Set the data free, and it will come back to roost wherever it's best used. And if Facebook doesn't win that race, well, it'll lose over time anyway. Such a move is entirely in line with the company's nascent philosophy, and would be a massively popular move within the ouroborosphere (my name for all things Techmeme).

Compete on service, Facebook, it's where the world is headed anyway!

• Posted by John Battelle at 8:00 PM
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Another (Three) Googlers Graduate

I get the sense that Google is, in many respects, a really really great Grad School that folks leave - after four or five years of hard work - with a degree in well heeled "Now What?"? Latest good guy to leave: Nat Stoll. Best of luck in the new venture, man!

This decision has been quite difficult but ends with positive feelings. I've felt in the past months as if I was breaking up with Google, and I don't think that to be a stretched analogue. I have countless close friends who I've been through the eye of the storm with to see clear sky, and we have history that is hard to think past. So, for all of my friends still in the 'plex, know that "it's not you (Google), it's me," and I hope that we can still stay close after we take some time apart.

Update: Kevin Fox is leaving too.

Read through the notes they write. They are very, very similar.

Wait, here's another. Hmmmm.

• Posted by John Battelle at 7:11 PM
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The "VRI": Doc Wonders If Technology Can Help Us Talk With Companies

Doc notes my post on conversations and asks why we, as consumers, are not more empowered to control our conversations/interactions with businesses who have tons of information about us and our use of their products/services.

I think what we need is something like an API. Let’s call it an VRI: Vendor Relationship Interface. Through it I could know, and see, what I’m getting from each vendor with which I “relate”. On top of that the dashboard could be built.

An interesting thing here is that I really don’t want to have a conversation of the literal kind with most of these companies, unless there’s a problem. I do want to relate with them, however. That is, I would like to request or arrange for services, pay bills and occasionally make suggestions or provide feedback. Most of that does not require wasting the time of another human being. A lot of that could be automated.

• Posted by John Battelle at 10:28 AM
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Deal with Data Portability, Facebook

It's just that simple. Deal with it.

And I think FB will. I have seen commentary on Digg and elsewhere to this end:

Facebook won't join Open Social, and you can forget about the pipe dreams of the Data Portability movement. The simple fact is, as the market leader, there is no benefit for or strategic advantage in Facebook making your data available to you in any format you wish.

I disagree. I think FB will open up. It's in their best interest.

Update: Scoble is back in the good graces of Facebook, that is to say, he is no longer banned. But I think the issue is pretty clear cut, and has to do with what is commodity, and what is unique. I have a post in me on this, that will come.

• Posted by John Battelle at 10:21 AM
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The Second Click

Dave Morgan, who now runs strategy for AOL's Platform A, riffs on my concept of the second click. Worth a quick read.

• Posted by John Battelle at 8:50 AM
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Om: Get Better Soon, Man

Om Malik, a pal and FM colleague, had a heart attack over the holidays - the best kind, the one that let him live and recover and, I can only imagine, come back with a renewed zest for life. But wow, what a wake up call to us all. Get better soon, Om.

• Posted by John Battelle at 1:49 PM
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Danny: Break Up Google (No, It's Fiction!)

Fun reading.

(And yes, I'm still getting caught up on my holiday reading)

• Posted by John Battelle at 9:03 AM
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FireFox IPO?

Henry breaks it down. And suggests they rename the browser Netscape. Ha!

• Posted by John Battelle at 8:40 AM
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Blekko

Rich Skrenta, no stranger to long time readers of this site, is starting a search site. He's calling it Blekko (for now, the pic is what you see on the site at present).

This should be interesting. From his post:

The web is big. Really, really big. It's literally billions and billions of pages. It's Carl Sagan big. And it's doubling in size every year or two.

So the idea that what you can see in positions 1-3 above the fold on Google are the sum of what the web has to say about every possible query is crazy.

And yet they have 85%+ market share, and little effective competition. At the same time there is such a fabulous business in search. It's the highest monetization service on the web, by far. Why does this Coke have no Pepsi?

Having just spent 5 years in the media space, I've come away with the idea that editorial differentiation is possible. But the editorial voice of a search engine is in the index...so it has to be algorithmic editorial differentiation.

This is the man who has written that PageRank wrecked the web, and that Google is going down. Rich is a serious guy, however, and I've emailed him asking for a quick interview.

• Posted by John Battelle at 8:31 AM
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Media Companies: Read This Post

Not this one, this one, by Scott at Publishing 2.0. It's very well put. (thanks, Pete)

• Posted by John Battelle at 8:26 AM
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CBS Video: Not In The Conversation

Close readers will notice a trend in 2008 here on Searchblog: I'll be posting stuff about conversations, and in particular how companies are doing when it comes to having conversations with their key constituents. You may recall my one of my seminal posts on this topic: From Pull To Point, in which I urged the Wall St. Journal and the Economist to join what I called at that time "The Point To Economy." I now call it "The Conversation Economy" and since I wrote that post, the NYT has joined, and it looks like the Journal may follow. But as this post from Poynter shows, CBS News ain't even nearly there yet, and it's particularly interesting, because it has to do with video, which I think is a key grammar in what I am starting to call the emerging Internet Creole. From the post:

CBS Sunday Morning may be the best news show on television. A couple of weeks ago, it carried a superb piece on the art of conversation -- one that I wanted to send to a friend. So, logically, I went to CBSNews.com to look for it.

It's not there. Or maybe it is -- but I certainly couldn't find it.

• Posted by John Battelle at 10:36 PM
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An Experiment with PDF Ads Via Yahoo

Kevin Kelly is trying out a new ad insertion program with his book "True Films". His write up is interesting and Kevin's always thoughtful about these things.

Earlier editions of this book have been available on Amazon, Lulu, and as a cheap download from my site. But with this new version 3.0 I am trying something new. I am offering this 200-page full-color guide (perfect as a companion if you have Netflix) as a FREE download. It's in PDF format, but with a twist. To help offset the significant bandwidth costs of these downloads (I hope my server can take the wave), I have appended advertisements to the PDF book. Here is how the ads work:

If you choose to see the ads, they will appear in a gray sidebar on the right, adjacent to the pages of the book, just outside the frame of the page.....These ads are inserted into the PDF by Adobe (using the Yahoo ad network) when you open the file. Like Google Adsense ads, they are contextual.

• Posted by John Battelle at 1:55 PM
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Wikia Search: BB Review

Boing Boing has a good write up of the philosophy behind Wikia Search, though it's light on any details. Wikia search will launch Jan 7, according to this WP article. From the BB post:

But ranking algorithms are editorial: they embody the biases, hopes, beliefs and hypotheses of the programmers who write and design them. What's more, a tiny handful of search engines effectively control the prominence and viability of the majority of the information in the world.

And those search engines use secret ranking systems to systematically and secretly block enormous swaths of information on the grounds that it is spam, malware, or using deceptive "optimization" techniques. The list of block-ees is never published, nor are the criteria for blocking. This is done in the name of security, on the grounds that spammers and malware hackers are slowed down by the secrecy.

But "security through obscurity" is widely discredited in information security circles. Obscurity stops dumb attackers from getting through, but it lets the smart attackers clobber you because the smart defenders can't see how your system works and point out its flaws.

Seen in this light, it's positively bizarre: a few companies' secret editorial criteria are used to control what information we see, and those companies defend their secrecy in the name of security-through-obscurity? Yikes!

• Posted by John Battelle at 9:11 AM
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Catching Up: Search Stats

Danny's got a review of recent search stats (from SEL Friday).

• Posted by John Battelle at 9:05 AM
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Disneyland

Why go? Well, I think this picture of my daughter Beatrix on the Teacups ride says it all...

• Posted by John Battelle at 8:26 PM
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In Case You Missed It, Some Parts of Google *Didn't* Grow Last Year

TC has the breakdown.

• Posted by John Battelle at 8:23 PM
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OMG

In a way, Gibson has quoted me. Oh. My. God. This Guardian UK article gave me credit for the "database of intentions" which readers will recall was post #63 (of about 4500 or so) and the basis of my first book. Gibson then goes on to quote Borges and the idea of the DBoI.

William Gibson was my hero at Wired, I worked with him as his editor (if you can call it that) while at Wired, but we've lost touch.

Wow, what an honor. Cool!

• Posted by John Battelle at 7:33 PM
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Predictions 2008

Related:

2007 Predictions
2007 How I Did
2006 Predictions
2006 How I Did
2005 Predictions
2005 How I Did
2004 Predictions
2004 How I Did

Has it been a whole year? I posted my predictions for 2007 on Jan 1, 2007, and here it is, the first day of 2008, and here we go again. This year I am going to organize my predictions by companies (just the big ones) and trends. I'm focusing on advertising and search markets and the largest companies in that space, as that seems to be what's on our collective minds these days, and it's what I seem to have focused on in the past, as I read through my past prediction posts.

So what are the trends in 2008?

Well, everyone I speak to is very worried that we're in for a major economic downturn, and we all know that a key lagging indicator of a recession is a serious downturn in the advertising markets. I'm going to buck all my colleagues fears, however, and predict that web-based advertising businesses will in fact enjoy significant gains in 2008. These gains, however, will not be evenly distributed. The markets will reward innovation and growth in new forms of advertising, and punish those who are seen as not having a strategy. (Recall that Google took off as an advertising business in the doldrums of 2002-2003).

This means it will not be an easy market for major public debuts. But we will see at least one, if not two new IPOs (for more see below).

2008 will also be seen as the year that proves Conversational Marketing as a new form of advertising (this is clearly a biased view), and by the end of the year, adding value to a customer's life through marketing will be seen as a necessity as opposed to an experiment. This is the logical extension of the search marketing revolution to all forms of marketing, well beyond direct response and the fulfillment of declared intent.

2008 will be the year of integration indigestion for the majors, and as such, it will mean M&A will slow down for those companies. All those advertising-based acquisitions in 2006-7 will have to start to pay off, and the results will be uneven to say the least. For specifics, see below.

Another trend we'll see is the continued erosion of the traditional mobile oligarchy. But despite the best efforts of Android, not much will get done this year. Don't worry, though, by 2009, we'll finally see a mobile web worthy of a serious development economy, one that looks a lot like Web 2 looked in 2005.

As for the Web 2 world, we'll see a ton of venture funded companies go by the wayside. This is healthy and normal. It's been a few years since the funding wallets opened, and it's quite normal for companies that couldn't get lift off by year two or three to close their doors. We'll also see an uptick in acquisitions, as the boards of companies that that thought they were worth tens or hundreds of millions of dollars decide to settle for decent returns. This will be particularly true for media and advertising related businesses, who will find home at large media companies that are traditionally not eager to pay significant premiums.

Now, given these trends, on to the major advertising- and search-driven Web companies:

2008 will be the year Wall Street gets frustrated with Google. The company has incredible numbers, and will continue to impress, but analysts, tired of bidding up the stock, will start to question the company's myriad ocean-boiling projects - after all, it's merely trying to reinvent Health, Energy, Telecom, IT (both consumer apps and OSes), and a few other major portions of the GDP. Look for a few querulous analyst reports and even a few downgrades by the end of the year, as Wall Street finally comes out of its honeymoon stage with Google and demands that the company consolidate its control in marketes where profits are secure: Search and Adsense. Look for complaints about profits and integration (or lack thereof) with regard to Doubleclick, and at least one major product flop that gets analyst tongues wagging. Google will continue to struggle with its display advertising business, at least as it is traditionally understood, in part due to a culture conflict between its engineering-based roots and the thousands of media-saavy sales and marketing folks the company has hired in the past two years.

Yahoo, meanwhile, will spend most of 2008 trying to figure out what to do with what it bought in 2007, and attempting to articulate a strategy that is anything but "we have 500 million users, so we must be important." By mid year, it will have succeeded, in part due to a clarification of its approach syndicated advertising (ie, how it will beat Google by delivering better than AdSense can to key partners). All the the big players in the advertising platform business - Yahoo, Google, AOL, Microsoft - are looking to monetize the magic middle of web traffic - high volume, but low CPM. Yahoo has access to a ton of this traffic, but in 2007 it couldn't seem to figure out how to make it pay (more). Right Media, Blue Lithium, etc, are all plays to this (as are aQuantive and Doubleclick and Tacoda and Quigo and...) In 2008, Yahoo will figure out a promising start. This is critical, because Yahoo will finally admit to itself that in the battle between Microsoft and Google, it is an increasingly minority player, and will need to bulk up to compete. By year's end, Yahoo will have combined in a major way with another third party, and it won't be either of the two aforementioned companies.

In 2008, Microsoft will fail to gain much traction in anything that is Web related. This will frustrate Wall Street and Microsoft's employees to the point of several key executive defections. Sound like last year? Yes, with one key difference. In 2008, Microsoft will finally figure out what do to with aQuantive, and by the end of the year, it will be clear what the company must do with it: Let it free. Yup, but this time, it will be as a public company that is majority owned by Microsoft, with fresh contracts to execute against MSN's inventory, both owned and operated (O&O) and syndicated (Digg, Facebook, etc.). Yeah, I'm going out on a limb here, but what the hell.

Now, what about current media darling/punching bag Facebook? Ahhh, this is a tough one. First, the company will suffer from a serious identity crisis, as it realizes it must change its core DNA from tech- and founder-focused startup to media-focused Real Company with Lots of Employees. This is not a new story, Google went through it in 2003-2005. But not many companies make the transition without serious collateral damage. Second, the company will find itself stuck in the hell of pre IPO preparations, again, like Google in 2003-4. This will frustrate company leaders to the point of looking for a CEO whose job is, in essence, to talk to Wall Street. But until Facebook figures out a way to justify its lofty valuation, this hire will be stymied. In short, the most important short term focus for the company in 2008 will be solving for the Social Ads quandry. (By this I mean how to build the equivalent of a AdWords and AdSense for the "social graph.") Though it will take promising steps, the company will fail to get it just right, at least by the end of the year and all by itself, but it will still find itself profitable and on the path toward an 2009 IPO. By mid 2008, there will be very serious rumors about an acquisition battle over the company between Google and Microsoft. But Facebook will play the middle, and most likely cut a deal with a third party, which despite the strong relationship with Microsoft, could well be Yahoo or a smaller but growing company that looks a lot like Facebook. Also, look for Facebook to make a run at NetVibes.

And AOL? As with aQuantive, Platform A will go public, if the markets allow (see trends). The rest of AOL will be sold or folded into Time Warner in ways that, regrettably, will finally signal the end of the original Case-ian dream.

Finally, what to make of Newscorp/FIM? Major problems will become apparent by early in the year, and those problems have to do with structure: Who is really in charge of "Fox Interactive", and what does that mean? What about Dow Jones? There will be a battle for control over all of Newscorp's interactive assets, one that will limit the company's ability to execute any clear strategy. That said, MySpace will make a comeback of sorts, and look for it to cut a very important deal in 2008 with regard to its future. This could even be - yes I'll say it - a spin out of the company as an independent public entity.

Well, that's about it for now. I reserve the right to revise this a bit in the next week, as I'm still pondering this draft.

Oh, yes. I usually end with a prediction about my own work. Not FM, as I begged off that last year and will do the same this time. But as for my writing: I will be back at work on a book, at least a couple days a week, by mid year. This is simply too important for me to ignore, it's literally a physical urge I feel now. 2008 will be the year it becomes real for me.

Again, to all of you out there keeping me honest and helping me think out loud, thank you. Here's to a great 2008!

Update: Some interesting reactions at HipMojo and Mashable, thanks to TechMeme for pointing it out.

• Posted by John Battelle at 12:26 PM
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