Rose Cantine

Here’s a photo of me with Caterina Fake, co-founder of Flickr, at the Burda DLD conference in Munich (January 21-23, 2007). I am a big fan of Flickr and I post all of my photos there. DLD was a terrific event in an excellent location (the HVB Forum). With venues such as HVB, it’s impossible to go back to the same old conference centers that have no soul.

For me the outstanding panels were Disruptive Connections, Where Are the Editors and Interface and Design (with Bruce Sterling [Sci-Fi writer],Walt Mossberg [Wall Street Journal], Tim Brown [CEO of Ideo], Chris Bangle [BMW designer]). Other highlights were Hackers, Inc. (with Pablos Holman), Luc Besson (the French director) and Norman Foster. Check out the program and speakers on the DLD 2007 website.

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Esther Dyson led the panel with Carlos Bhola (Celsius Capital), Rainer Hillebrand (Otto GmbH), Marissa Mayer (Google), Paul-Bernhard Kallen (Burda).

Carlos Bhola: in some sectors, innovation will not come from the US. China has faster, better, cheap infrastructure because they laid it at a later date. In mobile apps, China will leap ahead of the US. Weird pockets of innovation: the Koreans are the Venezuela of Asia, they produce the best soap operas, exported to Japan and China.

Paul-Bernhard (runs digital business of Burda): What did the shopping hours do for ecommerce? There is no natural big business alongside magazines online. So they are building B2C businesses in Germany and Korea. The US is still an innovator in technology but not in mobile technologies. Korea is very strong in mobile tech. Burda has a magazine in Korea which gives them access and affords a platform for them to sell products. Korea has a legal infrastructure that encourages investment.

Burda Style open source patterns: user generated content in the form of patterns. Something old is new again as Burda is going back to the people who sew their own clothes and allow sharing between themselves. They will launch a website in NY around pattern sharing that will also allow the users to exchange and sell their products based on patterns. (Note: I think this is a good platform for social networking.)

Rainer: They try to convince customers to buy online at Otto, one of the biggest online shops in the world. Thirty percent of the turnover of Otto worldwide is from online sales. Three billion euros to four billion are done online. They are trying to leverage all the trends online and it’s no longer just about transactions only. They have gift blocks, product rankings (like Amazon — so this is nothing new). The target this year is to find additional functionality on the site to get user generated content.

Esther asks if you can post a bad review of a product on Otto online: you can do this to a certain extent already today, but they will open it up some more to evaluations. It’s an opportunity for Otto to be able to react to the customer online because a bad review is still transmitted to other customers anyway.

Marissa: around 1 a.m. last night, the DNS record for Google.de had expired and acquired by someone other than Google between 1 and 3 a.m. So they tried to find the new owner and fortunately, they found him and asked him to redirect it.

What new things will search acquire in a few years? According to Marissa:
- search will become more personalized: Google will track what you searched for in the past, preferences, deeper understanding of the user
- the ten URL paradigm of search results is stale, it’s not the business they are in, they want to provide answers in the form of rich media, maps, local info, or text info, more variability in the type of answers that people get, lots of ways to interact with search engine via mobile phones
- computers in cars: search Google maps and earth in cars
- great search engine should be like your best friend (Esther says it should also book a flight for you). In some cases, there should be a dialogue. For users who are not satisfied with the first results, how do you ask follow up questions to give them better answers?

What about privacy? The best search engine knows the most about you. They need to know more about the users and Google has a firm privacy policy, they try to be transparent, so they have a search history that gives you an idea of what they are using to personalize search (Google desktop).

Questions to Marissa: in the context of video, how do you harness the ability of video for the advertising world? If tagging is the way to do this, how does this work with ads? Will this ever happen?

Answer: they are looking at how ads work on video (frames — sponsored by HP), click to play video ads, types of formats that work with people, they will roll out packaged formats for advertisers. They want to have ads that help users — ads that are considered information by the user, not intrusive advertising. Speech to text technology can also be used to enhance advertising.

Video based ads: Marissa mentions the Sony Pictures / Da Vinci code scavenger hunt that promoted the film and Google products. Click thru rate at the end of the trailer had millions of users. There is a company in Sweden called Play Ahead that has a social network — they set up a tamagochi on their site and other users clicked on it, fed it (by clicking on it with a mouse) until after 2 weeks, it hit puberty. The users had to do a scavenger hunt to get Clearasil to cure the pimples on the pet’s face because it is a teenager. This is an excellent example of new advertising for Clearasil

Innovation is everywhere but the difference is attention. It’s hard to get people’s attention with new things everywhere. Decentralization of innovation and business models — what does this mean for core businesses? Everything on this stage competes with other things which is confusing for investors and consumers. Which blog should I read? Which platform should I use? Which social network should I join?

A lot of web 2.0 sites: Are they businesses? Yes, because they amass so many customers, they provide such a great user experience already (e.g. YouTube). They know what the end users want.

Editor’s panel last night: Google interface, seems nobody designed it, it’s very simple but because it’s designed.

Telecom reform: where is google on the TV space? exciting but more things have to evolve before they go into it.

On the use of mobile phones in advertising:

- ads over mobile: mobile commerce will be one of the key business areas in the near future (Rainer), today we use mobile phones for service issues, but the displays are too small to present fashion on the mobile phone. The displays are getting bigger, you have a better user experience for showing fashion when you want. In Japan, they are much more advanced in selling fashion on the mobile phone (thirty percent of turnover of Otto in Japan is via mobile). It makes no sense to differentiate between computers, mobile, and television. Content for mobile platform — device independent content management system — is not hard to implement technically.

- Paul-Bernhard: telcos are very slow in decision making, it takes years to get anything done, there will be portals in mobiles, we will see videos and special ads.

- Marissa: we moved from cpm to cpc, but isn’t the answer cpa advertising? Cost per acquisition or cost per sales is the holy grail of advertising. Advertisers don’t know what to bid, they know how much they want to spend per sale, but hard to figure out what to bid. CPA would help advertisers bid more rationally. You can see how someone moves from search pages to the actual sales. On the cpm to cpc change: it gave Google more flexibility in presenting the ads (e.g. on other people’s sites). Are they charging more for cpc than for cpa? Isn’t google is overcharging (asks Alexander Straug of Truphone).Will the Google ad revenues decline if they move to cpc? Marissa does not think so.

Isn’t YouTube over valuated? Marissa says the valuations are in line because of the potential that Google has with so many users. Video is very important to search. Youtube is very popular. They have embedded players — they have become the video distribution platform for the web. So Google would have had to do a deal with Youtube to get the Google ads on video online or buy them and they chose the latter.

Carlos: we are in a bubble. There is a dislocation between demand and supply. There is too much cash and not enough good management. There is a macro bubble. When you have a move from incumbents to innovators (telecom), it’s the big incumbents who benefit, the value goes to them. You have to understand the value created to the END consumer. The few gems are actually underpriced.

Marissa: beyond advertising — focus on users not on money. if you are doing something that attracts users, you will find a way to make money, either they pay you directly or advertisers will come to you. If you provide a fundamental service, you will make money.

Rainer: selling physical goods is still a successful model but through different platforms.

Paul-Bernhard: There is no bubble, there’s always stupid money around but it’s not a market description; the ad model is not the biggest ad model, there are subscriptions for good services. Users can also get a share of what they do on platforms. Just because you have users does not mean you will get advertisers. Are they a community? Ultimately people will pay for services that are meaningful for them.

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One of the best panels of the Burda DLD conference (January 21-23 in Munich) was “Where are the Editors” with Arianna Huffington, Dave Sifry (Technorati), Tariq Krim (Netvibes), Jim Spanfeller (Forbes.com), Craig Newmark (Craigslist). Arianna blasted at the old media’s purported editorial expertise that failed when the NY Times hyped up Saddam Hussein’s weapons of mass destruction and helped the Bush administration get public backing for a false war. The editors in new media such as blogs can be the public. On business models, Dave Sifry believes that blogging shouldn’t be all about making money but making a difference locally.

I asked the panel a question about what to do with an angry advertiser. The panel agreed that bloggers should simply continue writing passionately because this is what brings the audience to their blogs. Arianna Huffington told me I should blog it — tell my audience exactly which advertiser wants to pull out because of my post (see also Esther Dyson’s summary).

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I am spending three days at Les Duves in Bioul (Belgium) to write, think, read and get away from everything . . . except posting on this blog and Muniwireless.com. You can find my photos on Flickr.

There is a weak cellular phone signal here but the house I’m renting has Wi-Fi and a very fast Internet connection. This is surprising given how rural this area is (although it is only an hour from Brussels).

I went on a two-hour walk today and came across castles and abbeys, many of which still make their own beer. I will post a review of a fabulous restaurant called L’Eau Vive and a more detailed review of Les Duves and La Classe (for group accommodations).

For business people like Rodrigo Sepulveda, founder of vpod.tv, getting used to the low bandwidth in the US is not fun:

I woke up today at 5:30 am, Las Vegas time. I’ve been trying to upload pix to Flickr, and videos to vpod.tv for the past 2 hours; also been trying to go through my emails. Low bandwidth is so unbearable when you are used to the high bandwidth you get in France… almost no pix is up yet, and still 40 min to go for just 1 video. I’m really amazed at how the Internet industry has developed in the US with such low connectivity ! So I guess I won’t be reporting live for a while, until I can find a better connection. And again, I’m not here to spend my time waiting in the press room… Someone please invest in infrastructure in the US?

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Apple came out with a Wi-Fi enabled mobile computer that runs OS X. I guess the only reason people are calling it a phone is that it is designed to be used on cellular networks. But it’s really a computer.

Check out the demo here:
http://www.apple.com/iphone/internet/

Danah Boyd wrote a blog post recently about how MySpace has turned into a giant ad-filled mess. She hopes that soon-to-be launched Blyk, pan-European free mobile phone operator (funded by advertising) for 16-24 year olds, will figure out how to do marketing without alienating people:

I believe that teenagers are the reason that mobile will happen sooner than we think. I don’t believe that the first explosion will be US-based. I am very hopeful about Blyk because i think that they stand a very decent chance of getting cluster effects working. (Note: the anti-corporate voice in me screams in horror at the idea of a free mobile service built on ads but there’s no one i trust more in mobile than Marko Ahtisaari. I have much respect for the whole team and i think that a free phone will be extremely popular so long as they get a few things right.) I think that mobile social network-driven systems will look very different than web-based ones but the fundamentals of “friends” and “messages” and some form of presence-conveying “profile” will be core to the system.

Blyk will launch first in the UK market in mid-2007, with other markets to follow.