Alterman in Context

Open Portals, Anti-Portals and the Wholesale Web

Prediction

Portals like AOL, MSN, Yahoo and Google will soon generate more impressions and ad inventory by providing their programming to third party websites then by serving retail traffic within their own domains.

The idea of internet portals morphing into "wholesalers" of programming to many thousands of "affiliates" should not be surprising. Wholesale distribution is the driver of nearly every major industry (from manufacturing to major media), and the television and film industries have worked that way for decades. NBC distributes its programming to loads of independent affiliates, so why shouldn't major web portals expand distribution beyond their own web properties? And from the perspective of most webmasters looking to invite user participation at their sites, programming complexity requires help from larger web players.

While portals like Yahoo and Google may capture dominant market share relative to other websites, their audiences are modest relative to the aggregate audience of niche websites across the internet. The universe of websites has a very long-tail, and soon it will be clear that earning real estate on those websites will be the primary mission of every major portal. Open Portal or Anti-Portal may be the best ways to describe this new animal.

User-generated content plays a central role

Perhaps there's nothing all that radical about syndicating content on the web. Video distribution has become fairly common, and there are a number of companies (like BrightCove and thePlatform) making it easier for content aggregators. But the syndication of traditional media is not enough to validate my outrageous prediction. A portal platform designed only to distribute video files is just not that interesting—the internet is by nature an interactive place. User participation is the key ingredient driving consumer traffic and, in the context of portals distributing programming to 3rd party websites, any definition of programming that includes only traditional media content is far too narrow.

Context will drive the next evolution of user-generated content and social networking (among other Web X.0 features), and that context will be expressed thru many thousands of niche-oriented websites, from major media websites to local radio, high school and family websites. Whether those niches are primetime reality television show websites or high school URLs, the winning solutions will blend premium and long-tail UGC within the many sub-contexts of individual websites.

By way of example, Major League Baseball will want to blend vintage footage of Babe Ruth on highest rated lists at MLB.com with highest rated Little League videos uploaded by 14 year-old fans and their parents. Or MLB.com will present a list of junior girls soccer videos alongside a premium content story about Mia Hamm. In any case, user participation blended with premium content will soon define the total experience within specific contexts and sub-contexts on many, many websites.  By the way, MLB also may also want to power, brand and distribute content to every Little League website in the country---enabling all these microsites is part of the challenge.

The only thing standing in the way is the difficulty of web developers effectively building the kind of complex backend infrastructure and media management necessary to support these user-driven experiences.

So how might this fancy new portal platform work?

Imagine if a portal like Yahoo took the initiative of providing any 3^rd party website open access to a wide range of hosted programs (with both traditional content and user participation functionality). The Yahoo affiliate platform would invite webmasters to browse for programming that improves their user experience, thus creating incremental traffic and ad inventory for both Yahoo and their affiliate websites. Programming would include user-generated content and social networking functionality, Flash video players, media-enabled banner ads, online games, a selection of live events, short video programs and everything else available from Yahoo's existing "retail" verticals. All programming would be supported by a seamlessly integrated media management system, complete with administration, transcoding, hosting, reporting and data mining services.

Widgets will no doubt be the fastest and most customizable way for webmasters to implement Yahoo syndicated programming. But these widgets will go beyond the skin-deep objects we've seen thus far (e.g. chat, video blogging). That is, most of the functionality would present itself to end-users at 3rd party website after they've clicked thru these deep widgets to more full-featured page experiences (branded to 3rd party websites, but "powered by Yahoo") with web services allowing customization and seamless integration of these experiences on affiliate websites. The widgets themselves (whether Flash, HTML and/or AJAX enabled) will be customizable by web developers with just a few clicks at Yahoo's affiliate center.

Portal distribution platforms will be even more ambitious than those provided by ASP trailblazers like Salesforce.com. Think of them as fully hosted tinker-toy sets for webmasters. Application frameworks like Ruby on Rails provide a half-step in this direction—what I'm describing is a fully hosted platform far more abstracted and non-technical than any programming language. The platforms, themselves, will be built on sophisticated, service oriented architectures, and may make use of JBI and other powerful messaging technologies. By contrast, deployment of hosted programming on affiliate websites will be trivial.

By elegantly blending off-the-shelf, hosted programming with their own premium content and personality, webmasters can quickly implement complete solutions with minimal engineering support and cost. Implementation of feature rich hosted programming will take hours, not months, and the only price to affiliate websites will be sharing some ad inventory with their portal provider—just as local television affiliates share ad inventory with the major networks.

Impact on internet advertising

This portal syndication model will have tremendous impact on internet advertising. In a very real sense Google's Adsense program is already embracing the concept of capturing real estate on third-party websites. The only difference is that Adsense is capturing real estate with advertising alone—zero programming! Imagine if NBC announced that there would be no Fall Lineup for its independent affiliates—just ads this season. How many of those stations would remain NBC affiliates? Zero is a safe assumption.

The implication is that soon as other ad networks begin to level the technology playing field (which is inevitable), Google will have to begin earning that Adsense real estate by providing their affiliates with programming that makes sites more sticky and viral. In fact, the Google Apps program is a first step in that direction. No surprise to me. Google is, after all, a very smart company.

Major media

Traditional web portals will not be the only companies interested in distributing programming to third party websites. Major media brands like MTV and Sports Illustrated will discover that their brands are powerful enough to live outside their own web domains in a more meaningful way. And the programming they provide third party websites will go far beyond traditional content, and will include hosted services that enable deep user participation. For example, it's easy to imagine MTV providing a turnkey "Powered by MTV" hosted service that enables every musician, record label and music-related website with user-generated content functionality, live events and other programming. Similarly, it's easy to see why it will be compelling for SportsIllustrated.com to provide every local Little League website their very own "Powered by SI" social network.

The promise

My predictions are all very self-serving, I'm ashamed to admit. My company, KickApps Corporation, has set out to build the kind of platform I've described in this blog entry. But there will certainly be others, and that's a good thing. The promise of Web X.0 requires that we increasingly make building amazing user experiences as easy as it is to use these experiences. The line between user and web developer will continue to blur as surely as the line has blurred between content creator and content viewer. Web developers that seek to fully empower their site visitors will need lots of help from platform companies focused on making their jobs easier.

Context is Meaning

Everyone has a theory as to how MySpace became the dominant social networking destination.  Was it weak competitors?  Better technology?  Interface design?  Savvy grassroots marketing?  Timing and momentum?  Blind luck?  Maybe all those things had something to do with it, but I tend to think that MySpace took hold on the strength of its original purpose: bands, music and underground hip (and hot girls also had something to do with it, I’m sure).  In other words, MySpace provided an initial context through which their community took root and grew.

Since then dozens of new social communities have appeared, funded by tens of millions of dollars from the venture capital community eager to participate in this aspect of the Web 2.0 tsunami.  Some have more and better features, others more robust architectures, yet none of the new general purpose portals have taken significant market share from MySpace.  So, is it game over?

KickApps is premised on the assumption that the next wave of successful social networking (and user-generated content) communities will come from major media websites and other content providers that offer their audiences contextually specific reasons to aggregate.  It’s easy to imagine why very large communities will form overnight around specific cable networks, reality shows, talk shows, radio stations, newspapers, universities, religious groups, expatriate organizations, gaming enthusiasts, celebrities, extreme sports, etc, etc.  And it’s easy to see why advertisers will be willing to pay a meaningful cost per thousand for advertising within a community with knowable demographics and closely moderated content.

From a user perspective, uploading photos and videos to new, niche-oriented communities is not a significant barrier to entry—anyone under the age of 35 can handle that task in a matter of minutes.  But from a webmaster perspective, the harder barrier to entry is technology development.  This is especially true for major media properties that will require sophisticated media management, administration and reporting functionality to protect their brands (and advertisers) from pornography and other potentially offensive material.  Building a very basic application that accepts video uploads and displays them on a page is relatively easy.  But when time-to-market is a critical competitive issue, building all the tools necessary to moderate and customize a community experience is quite another story.

So we built the KickApps platform with an eye toward serving many thousands of websites, big and small, with a hosted, turnkey approach to implementing sophisticated community functionality.  Our emphasis is scalability and customization with a range of tools that allows websites to focus on creating premium content and tasks more relevant to their core competencies.  Our roadmap will increasingly enable features that provide additional branding, real-time reporting and the dynamic inclusion of premium content within pages served by our platform.  Our implementation paradigm of “Viral Widgets” will allow our affiliates to present contextually relevant user-generated and premium content with an ever-growing array of styles and flexible layouts, and our Affiliate Center will evolve into a data-mining dashboard, providing real-time information.

The KickApps “Open Portal” philosophy is about providing easy access to a range of hosted technologies that enhances the community experience within our affiliate websites.  More on the Open Portal concept in my next entry.

Eric Alterman, KickApps Founder & CEO

The idea of starting the company I now call KickApps Corporation came to me in the winter of 1995, the morning after an evening visit with my grandmother. Grandma Ann was about ninety years old at the time, and we had spent a long evening eating Chinese food (Chow Mein was her favorite) and talking about her life growing up in Lower Manhattan. We had had this conversation many times before, but this time I remembered to bring my video camera and was able to capture two hours of fascinating storytelling from a women that was nearly a full-grown adult at a time when “the iceman” delivered house-to-house from a horse-drawn carriage. According to Gram, electric refrigerators didn’t make it to her neighborhood until “long after the War” (I’m still not sure which war she was referring to).

Anyway, I went to sleep that night very pleased that I had finally videotaped my grandmother and woke up the next morning with the idea of building a company that invites people to share their video memories online. Timing is everything, of course, and in the pre-cable modem era no self-respecting venture firm would touch my idea with a ten foot pole. So I put “KnowHow Video” (that’s what I called it in those days) on the shelf and began building a series of venture-backed companies based on technologies I licensed from military contractors like ITT and Lockheed Martin (e.g. Meshnetworks, SkyCross). But I would periodically return to my video sharing idea (always my favorite), and eventually built an initial prototype at www.KnowItAllVideo.com.

KnowItAllVideo was around long before the world knew anything about social networking and user-generated video, and we continue to keep that website live in its original form, mainly for nostalgic reason. Although I must admit that it stung a little bit to see the birth and explosive growth of similar sites that followed KnowItAllVideo, building a destination website was never part of my entrepreneurial DNA. My vision was always to power every website with user-generated content and social networking functionality. So KickApps is a hosted platform company designed to do just that.

I write this blog on the eve of our public launch with high expectations. We have a talented and motivated team, supportive investors and a vision that we all believe in. My grandmother is gone now (she made it to ninety-nine!), but I know she would have been proud of what she inspired.