Viral + Monetizable = StartUp Magic Quadrant - ReadWriteWeb

These are the three streams of the Internet - communication, entertainment and research. You go online to communicate, have fun or find some information. The viral properties of each stream are quite different:

1. Communication. This is perfect for viral. Think Hotmail, Twitter, Skype and Facebook. The viral property is built into the service.
2. Entertainment. Think You Tube or Second Life or any online game. I tell people about a really entertaining video. The viral property is weaker as it depends on a stream of loss-leader hits.
3. Research. Google got viral adoption because the alternatives were weak and it was a major problem faced by millions every day. As it was free and dead simple to use, there was no barrier to adoption; but the viral spread was only possible because it was such a big problem and it was so much better than the alternatives. This happens very rarely.

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Communication. This is perfect for viral. Think Hotmail, Twitter, Skype and Facebook. The viral property is built into the service.

Entertainment. Think You Tube or Second Life or any online game. I tell people about a really entertaining video. The viral property is weaker as it depends on a stream of loss-leader hits.

Research. Google got viral adoption because the alternatives were weak and it was a major problem faced by millions every day. As it was free and dead simple to use, there was no barrier to adoption; but the viral spread was only possible because it was such a big problem and it was so much better than the alternatives. This happens very rarely.

Highlighted by swanlin128

when it is a genuinely new form of communication, the viral adoption is stunning in its speed

Highlighted by maggie_diigo

from a point of view of monetization, the order is reversed:

Highlighted by maggie_diigo

Research is simple to monetize. It leads to a database of intentions and that leads to any number of advertising models that have a) proven returns to advertisers b) proven use for searchers.

Entertaiment can be monetized through advertising and “freemium”. We are used to the idea of ads to get free entertainment on TV/Radio and used to paying to go to the Movies or rent DVDs.

Communication is really tough to monetize through advertising. It has to be free to be viral (and it can be free because the marginal cost is close to zero). So the only way to make money is some form of advertising. It is just really, really hard to find a good way to offer advertising around a communication service that works for both the user of the service and the advertiser

Highlighted by swanlin128

Research is simple to monetize. It leads to a database of intentions and that leads to any number of advertising models that have a) proven returns to advertisers b) proven use for searchers.

Entertaiment can be monetized through advertising and “freemium”. We are used to the idea of ads to get free entertainment on TV/Radio and used to paying to go to the Movies or rent DVDs.

Communication is really tough to monetize through advertising. It has to be free to be viral (and it can be free because the marginal cost is close to zero). So the only way to make money is some form of advertising. It is just really, really hard to find a good way to offer advertising around a communication service that works for both the user of the service and the advertiser.

Highlighted by maggie_diigo

that is a small prize compared to a Research service that gets mass adoption. Google is valued at over $200 billion because they got viral adoption for a Research service. They have even found a way to make email advertising effective

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the service has to be useful on a daily basis for mass markets.

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Research is currently solitary. It is not fundamentally entertaining. I don’t see fun as a driver for Research beyond a gee whiz phase. However collaborative research, search with a communication angle, does look like the next big thing. My definition of Web 3.0 is:

“The combination of Web 2.0 mass collaboration with structured databases”.

Highlighted by wade

collaborative research, search with a communication angle, does look like the next big thing. My definition of Web 3.0 is:

“The combination of Web 2.0 mass collaboration with structured databases”.

Highlighted by maggie_diigo

If you can build a research tool that propagates virally and gets more useful with each person who uses it, you build a business with phenomenal power. That is a lot easier said than done. The purely technical challenges of creating structure out of lots of unstructured input is considerable. Much tougher is the chicken and egg problem; the tool has to be useful out of the gate, which is tough if the use derives primarily from the interaction of many people.

Highlighted by wade