Death by Smiley Face: When Rivals Disdain Profit - New York Times:
"THE tectonic changes facing media companies are by now the topic of an often-recited sermon. Put briefly, digital technology is placing control over much information squarely in the hands of consumers and creating all kinds of opportunities for new entrants who can push the revolution forward.
Understandably, attention in this race is focused on the companies that are, as the management consultants like to say, transferring value from conventional outlets to new disruptors that deliver personalized media more efficiently and hence with greater profitability. In other words, to the victor go the spoils. "
and ...
"These are new-media ventures that leave the competition scratching their heads because they don't really aim to compete in the first place; their creators are merely taking advantage of the economics of the online medium to do something that they feel good about. They would certainly like to cover their costs and maybe make a buck or two, but really, they're not in it for the money. By purely commercial measures, they are illogical. If your name were, say, Rupert or Sumner, they would represent the kind of terror that might keep you up at night: death by smiley face.
Probably the best-known practitioner is Craigslist.org, the online listing site. Although it is routinely described as a competitor with — and the bane of — newspaper classified ads, the site is mostly a free listings service that acts as a community resource. When the company contemplates imposing fees for using its site in a particular city, as it has recently in New York, it does so cautiously and thoughtfully, as a means to weed out real estate brokers who are abusing the site by posting their ads over and over."
And the cover story of Newsweek: (note: copyrighted material)The New Wisdom of the Web - Next Frontiers
Why is everyone so happy in Silicon Valley again? A new wave of start-ups are cashing in on the next stage of the Internet. And this time, it's all about ... you.
April 3, 2006 issue - A little over two years ago, even the most sensitive entrepreneurial radar could not pick out two pairs of people on opposite ends of the West Coast starting companies that would make plenty out of nothing. In Santa Monica, Calif., dot-com survivors Chris DeWolfe and Tom Anderson were hatching the idea of taking on biggies like AOL and Yahoo with a Web site consisting only of stuff that people would bring to it. And up in Vancouver, B.C., married collaborators Stewart Butterfield and Caterina Fake were just figuring out that the online game they were developing might work better as a way for people to share their digital photos with each other.
Now both fledgling companies are leading a charge of innovators making hay out of the Internet's ability to empower citizens and enrich those who help with the empowerment. The southern California guys head MySpace, the prime hangout for 65 million (mostly young) people, and thousands of rock bands, movie stars and marketers begging for their attention. Canadian-born Flickr, by building a 2.5 million-member community solely around a passion for sharing photos, has become a poster child on how a well-executed Net effort can make big changes in people's habits. Welcome to the new tech boom.
Oh, and unlike the old boom, where entrepreneurs couldn't get to the IPO broker's office quick enough, these crafty duos have already taken the money and stayed. Yahoo has snapped up Flickr to bolster the portfolio of services it offers to its half-billion users. And the new owner of MySpace is that wild and crazy (like, um, a fox) digital punkster, Rupert Murdoch—hedging his bets on what might be the next Net-powered media upheaval.
The massive success of MySpace and the exemplary strategy of Flickr are milestones in a new high-tech wave reminiscent of the craziness of the early dot-com days. This rebooting owes everything to the enhanced power and pervasiveness of the Web, which has finally matured to the point where it can fulfill some of the outlandish promises that we heard in the '90s. The generic term for this movement, especially among the hundreds of new companies jamming the waiting rooms of venture-capital offices, is Web 2.0, but that's misleading—some supposedly Web 1.0 companies like eBay and Google have been clueful about this all along. A more fitting description comes from Mary Hodder, the CEO of a social-video-sharing start-up called Dabble. (Since Dabble has not yet launched, I can't explain exactly what that means.) "This is the live Web," she says.
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