For the Week of April 24, 2006
Who wants to revisit electronic commerce?
God knows I do.
Let's review our problem set, shall we?
- There's no valid business model for Web content.
- Every bit on a mobile network is a service, charged for and controlled by the carrier.
How can we take advantage of this?
- Communities can be created free on the Web.
- Bits can be sold for money on mobiles. But only the right bits, the ones with the highest value.
Over time, the mobile Internet will become more-and-more like the laptop Internet. But right now the economics are quite different. It's time to take advantage of this.
No one has yet succeeded in this, but here's the trick.
- Create a vertical community on the Web, database-driven, filled with interaction, free but requesting PII (personally identifiable information).
- Deliver mobile services aimed at that community, advertised on the Web site (and elsewhere online).
This is not an easy dollar. It takes an immense amount of free content to build a community, along with software that scales this intimacy, that enables people to create their own worlds based on the free content. Only after you've engaged in such a world will you gladly pay to put parts of it in your hand.
What you need to do, first, is to gain a solid relationship with mobile carriers. This is not easy to do. It's a high hurdle to jump. It's a barrier to competition. You need to practically guarantee volume. That's the only way to get your costs down to the point where the mobile business becomes profitable.
It is only after the mobile side becomes profitable, after you're the carriers' "best customer," that this kind of strategy starts to make sense. And it is in the process of becoming a "best customer" that most mobiler data companies forget the Web.
What they forget is that the Web is all about interaction. It's not about content. It's about community. It's about scaling intimacy. It's about building databases that move toward one another - registration, content, traffic - so people get in deep quick and stay deep. That's where the loyalty lies, not in what you do for them but what you can get them to do for one another.
Many of today's most successful "Web 2.0" (database) sites find it hard to monetize success. DailyKos barely breaks even. MySpace is not that wildly profitable. The reason for that is that they don't cross over to the mobile world.
You create your own dossier on a Web site, and this should inform what you pull toward you in the mobile world. The mobile world is moving quickly in terms of the file sizes it can accommodate, but it is moving at a snail's pace when it comes to its business model.
You can take advantage of that. People can self-select those RSS files and data types they want updated wherever they are, and you then deliver them. Companies, organizations, and campaigns of all sorts will pay for your knowledge on building community and making it pay in a mobile world.
Right now the chief sale is SMS. Simple text files move easily between carriers. Next comes MMS, combinations of SMS files that can describe small bits of content (like ringtones). Then comes RSS, mobile alerts when the specific bits you want to know about update. And semi-automated services for those sources that don't support RSS. (Most news sources don't support RSS.)
Building communities using the Web defines audiences that will buy mobile content. You have to live in both worlds to satisfy this demand.
Like I said, this is not an easy dollar. You have to build separate teams, then integrate them. But if you wait for the mobile world to look just like the Internet before you move, you're going to be crushed by the people who have been brought up in both worlds.
Integration, in this case, means integrating the mobile world of the future with the Web world of today, and finding ways to profit from the specific characteristics of both.
I have made a big decision. I have moved my main blog, formerly called Mooreslore, to danablankenhorn.com under the name Dana Blankenhorn. (Hey, that's MY name.) The blog is written in Typepad and is also available at 200billionscandal.typepad.com
I'm continuing to produce a special blog on Open Sourcefor ZDNet. I am pleased to say it has grown into a real money-maker. I work as a freelance writer in Atlanta, and am on the development team for Voic.Us, which aims to become a political "super-site" and offer mobile marketing services. Please visit that blog as well.
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ZDNet Open Source
Clued-in is mobile Linux. It's where the action is. Too bad the action is in China.
Clueless are predictions of Desktop Linux. It doesn't matter and it needs marketing.
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