Notes from the AlwaysOn OnMedia NYC : Content vs. Connections

alwaysOn Onmedia NYC

Do you go to the internet for the content or for the connections?

Drew Lipsher of Greysoft says that “The perceived economic value of content is approaching zero.” Jim Spanfeller of Forbes.com says that the reason people come to the internet is the content.

People get fired up about one or the other concept, and there is a big debate going on. Jeff Jarvis has a good wrap on it.

I don’t see it as “either-or” proposition. One needs content, one needs connections, one needs content generated by the connections, and one needs connections generated by the content.

Today I spent more time on the internet reading WSJ and XKCd then visiting my LinkedIn or Facebook profile page. I also know a person who spent all her time today on Myspace, reading and writing and drafting clever messages and posting animated gifs. I went online for the content, she went there for connections and, I would argue, the content generated by the connections.

There are various forums and bulletin boards that I frequent. I have never posted in many of them. Forums are THE place for user generated content; but I don’t go there for connections, I visit them because of the high quality content that the users generate on the forum.

The main reason why one even needs to make a distinction between content and connections, is that the old way of serving ads on the internet are not working as well. For the longest time, the ads were tied to the content. There was a website with specific content, which attracted a particular type of reader and the ads were served from the webpage to the user. Publishers always thought it was too risky to trust their brands to “user generated” contents.

In new social media environment, the ads need to be dissociated from the content and need to follow the user. Don’t follow the content, follow the connections.

Each method of advertising, TV, radio, Print, content, or connection, presents a different slice and blend of the user base. Different demographics follow different trends and different media. Once you know which group you want the exposure to, an optimized ad strategy will tell you which media, or which content or which connection to use.

Coming back to the notes from the AlwaysOn OnMedia, AbleBrains has a summary of the CEO pitches. Most notable presentations were from AzoogleAds, which is a performance based ad network and relies on CPA (cost per action) to generate revenue and not on CPM or CPC.

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and UnisFair which provides virtual events and virtual worlds for marketing or virtual interactions with a user group. Cisco has “Cisco Partner Space” where facilitates collaboration between customers, partners and Cisco.



HealthCentral.com raises $50M, valued at (guesstimated) $150M.

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HealthCentral has a network of about 30 sites on specific health topics, such as migraine, pain management, Alzheimer’s and they also own Drkoop.com, healthscout.com websites, among others. The websites that they own, tend to have very long names like myDiabetesCentral.com, HighBloodPressureConnection.com, and MyDepressionConnection.com.

Traffic numbers are: $7M unique visitors with 30M page views monthly.

From PaidContent, we hear that they have raised $50M led by IAC (InterActice Corp, a public company listed on NASDAQ), and carried forward previous investors like Sequoia and Carlyle.

IAC acquired, and I quote:

a major (though still minority) stake in HealthCentral.

A major, but minority stake: could be anything from 25% to 49%, I guesstimate that it is closer to 35%, giving the guesstimated valuation of Health Central at $150M, with an error bar of 50M.

You probably think that I am going to crib about the valuation again or try to contort arguments to justify the valuation. Nope!

Healthcentral has launched a series of TV health specials, hosted by Dr. Dean Edell and now syndicated on over 70 TV stations including major market stations like WCBS-New York, KABC-Los Angeles, and WLS-Chicago) with a potential viewership of over 60M.

So it seems that the investment is made to implement some of the multimedia strategy of Web, radio and TV, and considering that it is number two health related network (after WebMD), the numbers seem to make sense.

The HealthCentral Network was acquired in 2005 by Polaris Ventures, Sequoia Capital, The Carlyle Group and Allen & Company, so it is a nice turn around.

Via AlarmClock



$425M invested in Virtual Worlds and that’s just the last quarter.

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Virtual worlds (and their ecosystem of game developers) have attracted a great deal of attention, both by the VC firms and by the technology and media companies.

During the period Aug-2006 and Sep-2007, the amount invested in the Virtual worlds was close to $1B.

Two notable acquisitions last year were Club Penguin ($600M) by Disney, and Havok by Intel ($100M).

Prominent investments in the Virtual World sphere were: Trion World Network ($30M) by Rustic Canyon Venture Partners, Double Fusion ($26M) by Norwest Venture Partners and others.

If you do not recognize some of these names, that is because these companies provide backend support. Havok’s product line includes tool sets for physics, animation, and character behavior. If the waves in the water, or the trees in the Second Life look realistic, it is because of the software written by Havok. Double Fusion provides in-game advertisements, a clever way to capture the attention of the gamer.

During the last quarter 4Q07, the investment in the virtual worlds has been about $425M. Most of the investors in the Q4 are venture funds. For example, ZeniMax Media, publisher of original content for gaming consoles, received investment from Providence Equity Partners.

The most crowded segment is probably the virtual worlds for teens. Some of the Teen Virtual World games that received funding include Gaia, Hidden City, Numedeon and Star In Me.

Virtual World Management Industry forecast contains predictions from several Virtual world luminaries. Many have suggested that the virtual world will become common place in a group collaboration.

Even though there are companies like Quaq and Unisfair, offering attractive solutions for group collaboration, I do not believe that we will see any significant level of adoption of Virtual Worlds in a business setting any time soon. I also think that many of the group coloration suites offer a great deal of “eye-candy” in terms of what can be done, but the hardware is not ready, bandwidth allocation is not there and masses are not waiting for real time collaborative tools.

Unisfair might offer online conventions but trade conventions are much more than just electronic booths with LCD displays.

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There is no doubt that Virtual Worlds will see massive growth. It is not mainstream yet, but it will become so. It took years before businesses adopted the Instant Messaging technology. Similarly, once virtual worlds start permeating and pervading everything we do, THEN the business folks will jump in.



Twiistup 3

I had the chance to attend the Twiistup 3 event last Wednesday, which took place in Venice, CA at “Air Conditioned.” For those who are unfamiliar with Twiistup, it’s a quarterly event thrown at a nightclub to showcase prominent tech start-ups in southern California. The hip venue, dim lights and flowing drinks establish Twiistup as a step removed from shirt-and-tie networking events thrown at your local Marriott (see pics below). The feel on Wednesday night was more “Hollywood” than “board room,” which is what makes Twiistup unique. And just like a true Hollywood style event, this one wouldn’t have been complete without celebrity blogger Perez Hilton (perezhilton.com) in attendance.

Here are the nine companies that were showcased:

Askmenow - Mobile and desktop search platform, creators of askwiki
Docstoc - Professional document sharing community (disclosure: I’m interning at Docstoc)
• Magento - eCommerce platform
OfficeZilla - Create and manage your own private intranet
PeopleJam - Social community focused on personal goals and empowerment
Rubicon - Connects websites with over 300 advertising networks
SpeedDate - Web-cam speed dating
ThemBid - Allows businesses to bid for local jobs
• Yellowbot - Local reviews and recommendations

Since I spent most of my time at the Docstoc booth, I didn’t get a chance to look at every single company. Although out of the ones I did check out, I liked SpeedDate a lot. Once you login and click ready, you are instantly matched with another SpeedDate user and thrown into a video chat. The initial chat only lasts 30 seconds, after which you can click ‘yes’ or ‘no.’ If you both click yes, then the conversation continues for 3 minutes. After your time’s up, you are both matched up with new people and the process starts again. By the way, if anyone is still skeptical about online dating, don’t be. Take a look at these statistics from Mark Penn’s 2007 book Microtrends:

  • 61% of online Americans do not consider online dating “desperate”
  • 1 in 4 single Americans who are looking for a romantic partner (about 16 million people) use an online dating site
  • In 2004, online dating sites netted roughly $470 million, up from $40 million in 2001
  • 92% of married couples who met online describe their marriage as “happy”

Of the two people that were presenting at the SpeedDate booth, the woman I spoke to was a promoter contracted to do publicity by the company. I’m not sure about the other guy, but it would have been more informative if the actual owners or members from the development team showed up. Regardless, the product looked cool and they were giving away free webcams at their booth. Score.

Webcams weren’t all that were being given away at the event. Perez helped give away three Rock Band videogame packages, which I desperately tried to win. Those couldn’t compare to the grand prize, though. Each attendee to Twiistup 3 was given a token to hand to their favorite showcase company, and whichever company had the most tokens at the end of the night was presented with free web hosting from Media Temple, a $5000 search campaign from Yahoo! Search Marketing, and a 1 on 1 consultation from Clearstone Venture Partners. The winner? Rubicon. Coincidentally, the company won’t have much use for the Clearstone consultation, as the VC firm were the ones who funded Rubicon for $4 million in a Series A round in October ‘07.

All in all the event was a success and lots of fun. I’m looking forward to Twiistup 4 and will be sure to make a post here for our SoCal readers as soon as the next event’s details become available.



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