Questions of the day at mobile web 2.0, 11th June London :
Finding monetization in the next phase of mobile web services, Innovation in user experiences New technologies
Monetization of mobile web is small At the end of the day, the money around mobile web is still small compared to the substantial revenues of mobile voice and messaging. Perhaps 30 B$ content and 3 B$ advertising compared to over 600B$ voice, SMS and data access. But you can’t milk a calf and the business will grow.
Tony Fish, CEO, AMF Ventures & Author, “Mobile Web 2.0” presented the opportunity in monetizing the mobile digital footprint (user profile and behavior ). The new world focuses on the [UGC] creation side and posting mobile content to the web. Advertising revenues complement value-added service charging models. This is a transition from the old world mobile industry focused on consumption, centered on payment for services, applications and content. But thee new world will not wipe the old word it will improve it.
The monetization opportunities coming from uniqueness of mobile : Mobile payment, complementing credit cards and cash ; in the old world you get back services and content. Mobile footprint : (data follows you all the time leading to accurate digital footprint, advanced personalization, beyond identity protected by AAA (bank and credit card details), location) ;. in the new world you give your footprint to the community and get in return reputation, enhanced search algorithms and results; the ownership of this meta-data is a new battle ground.
Nick E. Heller, Strategic Partnerships, Media & Publishing, Google. He also sees mobile advertising complementing overall advertising with unique features : Location remains the top unique selling proposition, despite the fact that this is a 10-years old idea. Usage pattern : 8:00 (commute), 12:00 (lunch) and most important 22:00 (bed time). Device interaction : primarly SMS (CPM) today – evolving to web searches (CPC) and user interaction (CPA) using cameras such as Android scan (taking pictures of barcodes to trigger searches). User authentication was one aspect when discussing privacy protection, safe search, personalized advertising (context sensitive)
Stéphanie Hospital, VP Marketing, Orange online advertising : said the priority is to establish basic metrics for mobile advertising and expand the main inventories in WAP banners and messaging. Current CPM/CPC rates are not significant at this stage. Experimentation with video or interaction (with Adidas to win tickets in France) shows the future potential for branding campaigns and later we will improve at user profiling.
Paul Goode from m:metrics confirmed the success of SMS advertising campaigns with 50% of EU and 20% of US subscribers having received messages. He estimated mobile media audience being 25% of all EU5+US subscribers (~ 106 million, > 6% growth) with a >3X greater usage by the 10% smart phone users (~ 37 million, 0% growth). The biggest growth is seen in social networks, used by ~ 4% of subscriber spending 1:30 hours/month on facebook.com or myspace.com, ranked in the top 5 visited sites. US now leads over Europe in mobile media consumption and web access : Americans spend 4:30 hours/month browsing, British spend 2:25 hour/month. Demographics show 45% of 28-30 year old with the biggest usage of mobile content. On the topic of smart phones he noted that N95 outsold iPhone 1:2, the iPhone being bought by those who can afford it. Innovative user experiences More than the money, the passion of both users and developers alike seems to fuel the development of new user experiences, whether for self-expression, social networking and the holy grail of location-enhanced services.
Carl Taylor, Director of applications and services, Hutchison Whampoa Europe : stated the priority is to improve the interaction between users, devices and content to make the experience more relevant. This involves more psychology than technology and aims at enabling consumer peer review and viral marketing. [ Carl has been an advocate of applying semantic web mark-up such as W3C Powder to ensure better relevance ]. Hutchison has made the 3 mobile broadband offer attractive to consumers and had the courage to launch Skype phone at £12 / month. They see premium content and advertising business model expanding, provided there is tuning of the delivery value-chain across operators and content providers.
Christian Lindholm, Partner and Director, Fjord : he told the story how he came late at Radisson Edwardian May Fair Hotel because his search for london mayfair hotel brought 400 results on mobile Google Maps excluding the right one. In this user experience, “places” are different than “street addresses”. He joked that London black cabs is the best LBS system because they have contextual and semantic information.
Matt Jones, Co-Founder and Lead Designer, Dopplr.com Commenting further on looking LBS user experiences he said he liked the topic because it's so difficult and bad things can happen. Dopplr is about describing interesting parts of places and the social aspect of places. For this you may want to increase fuzziness rather than accuracy of the location.
Anja Kielman, Founder aka-aki demonstrated their innovative social service piloted in Berlin, uses bluetooth to alerts users with similar profiles logged within 20m in bars, shops and crowds. Anja says it’s designed to take your social network to the street and create connections in the real world. The web version has all the standard features like profiles, friends and messaging. The mobile version is a small Java application that you can send to friends, one connected phone can serve as a hub for the other, therefore reducing the cost of data connections.
New technologies Virtual and real devices are also fueling innovation.
Anders Elleby, Swisscom Participation : innovative services can be launched with devices such as the Ogo2 devices adopted by (~100’000?) Swiss teenagers who can connect to MSN IM, call and now browse the web. Also mentioned, Starfruit virtual phone booth in Second Life allows SMS and offering flowers to the real world. In general MNO can innovate with network enablers (for all access networks), device applications (despite the fragmentation of platforms) and overall services, rather than focusing at declining premium content revenues.
Thomas van der Zijden, VP of Marketing for Polymer Vision: presented the “Readius” a pocket sized reader with a 5" rollable display and 3.5G connectivity. Readius uses organic materials in all elements of the display and can be rolled.
I visited Brazil August 13th-17th to study 3G multimedia services evolution. I saw big changes from my previous visits. In 2002, the big thing was 2G prepaid launches - my job contributed to a large deployment (at TeleSP, now part of Vivo) together with Portugal Telecom Inovacao. Then in 2004 the topic was NGN and VoIP, we shared our experiences with operators such as Brasil Telecom, and their CEO, marathon runner Carla Cico. I was really impressed with her but remained a modest ½ marathon runner. Between 2004 and 2007 I saw the following changes :
2G mobile penetration reaches 60%, and 3G is coming fast Growth exceeded 20% in recent years, Brazil has now 115 million mobile subscribers, a 58% penetration, 80% on pre-paid plans according to Anatel . I have estimated the monthly ARPU at 13$. All this makes Brazil the 5th largest mobile market (after China, US, Japan, Russia). On the mobile innovation side, 3G is finally being rolled-out with auctions by Anatel of 1900MHz and 2100MHz bands (announced in 2000 but delayed to 2008). The plan anticipates 80% urban coverage by 2010 at a cost estimated at 3B R$.
Mobileoperators are consolidating in a duopoly The 2nd change is that competition in Latin America with Mexico is leading to a duopoly of mobile operators in Brazil. Telefónica’s is taking control of Telecom Italia and resulting an equity in 53% of Brazil's cellular. This balances América Móvil’s control of Claro led by Mexican billionaire Carlos Slim, who also controls Telmex and is expanding in other Latin American markets. A good measure of market concentration is the HHI index which went down from 3213 to 2257 in 5 years (Herfindahl-Hirschman Index) and should drop further after recent M&A.
Like for my previous visits, I was hosted by excellent colleagues : Jefferson Kishida who has a lot of insight on the network infrastructure in the country and Fausto Dedeschi who has been working with the Latin America telecom industry for years. (in the picture Jefferson Kishida with me at Brazil Telecom in 2004 and in 2007 at Vivo with Fausto) Dedeschi and Carlos Alberto Pinto "Cap") During this visit, I had the opportunity to get feedbacks from major operators on the 3G plans : Vivo and TIM (Telefónica–controlled) and Claro (América Móvil’) who dominate but also Oi who is gaining market share (controlled by Brasilian operator Telemar).
Vivo (Telefónica, Portugal Telecom) 30 million subscribers 1600 M$ revenue 370 % growth, 403 M$ profit The company is present in 20 Brazilian States or 86% territory coverage. According to their network director Attila Branco, VIVO are consolidating their networks (CDMA/TDMA and GSM/EDGE; deploying HP's HLR solutions). They are also innovating with content services (using CoreMedia DRM with PT’s MMBox/DiNO platforms) and now preparing 3G video services.
TIM Cellular (Telecom Italia, Telefónica) 23 million subscribers, 3400 M$ revenue, 84 % growth, -153 M$ losses
Claro (América Móvil) 22 million subscribers (GSM1800, TDMA800) 3900 M$ revenue 39 % growth, 498 M$ profit also plan to launch 3G services over existing 850MHz spectrum
Oi Movel (owned by Telemar) 13 million subscribers (GSM1800) 1600 M$ revenue 35 % growth, 64 M$ profit
Brazil's social networking expands into mobile 2.0 The 3rd change is the continued expansion of the Brazilian internet phenomenon . On the infrastructure side there has been visible progress : internet users doubled to 41 million since 2004 [ITU 2007] connected using 51 million fixed lines (26% penetration) and 6 million fixed broadband (3.1% penetration, 11th worldwide). Some new cable companies are challenging the 5 incumbents Telesp, Telemar, Brasil Telecom, Sercomtel, and CTBC Telecom : I noted the cable operator Net Servicios offering a 8Mbps service. Broadband price is still a big inhibitor, the cost ratio to the average income being 10 X that of western Europe. PC penetration is 11% and HP is one of the manufacturers contributing to efforts to lower prices and there are offers in the range of 500$ with 24 month payments. Brazil leads is social networking usage. The country takes the number 2 position worldwide in Ipsos’ Face of the Web survey. They measured active (30 days) SNS usage in South Korea 55%, Brazil 41%, China 27%, Mexico 26%, and the US 24%.
MSN Messenger and Google's Orkut social network were adopted immediately in Brazil . Google's Orkut claims 12 million monthly visitors in Brazil, that’s 50% of their worldwide traffic and over 30% of Brazil’s internet users. Unfortunately a few of them showing illegal content as Wall Street Journal reported. The settlement of such abuses by peer moderation as well as regulation is unfortunately part of reaching the maturity of services.
In Second Life, Brazilians are the 6th largest group with nearly 5% of worldwide users. I have seen Paulisto SNS users in trendy internet bars such as this one :
The natural evolution of social networking on mobile has already generated a few announcements. Dada Brazil launched a mobile SNS that enables mobile blogs with pictures and video. Dada Mobile has 7 million members worldwide, 3.2 million in the US. Vivo and StreamVerse ran a proof of concept for mojo, which enables mobile blogs, RSS feeds, vote/picture-vote, chat, share images, and status. And .but does not disclose number in Brazil. Focus Films / Conquest, a Brazilian media company together with Korean IntroMobile launched a personal blog solution NetMirror. IntroMobile had previously deployed its mExtendMedia MMS solution at VIVO.
Mobile instant messaging is also being promoted nicely. This add for MSN mobile was posted on You Tube :
Mobile 2.0 must fit with social and economic differences Brazil is that is a country with divisions. Sao Paulo state and city account for 3 million of the 5.3 million Brazilian enterprises. A majority of subscribers belong to the poor population but a small part are educated and rich . To deliver the potential of 3G social networking services it’s important to think about services that would have both a high-end western-style (like mobile TV content and video blogging) and a cheaper 2G version (like and group SMS, ringtones, cards, notifications). Brazil’s economic position is however in the top tier within BRIC countries (GDP per capita at purchasing power parity, source: Economist) Brazil 8,997 Russia 11,059 India 3,508 China 7,498 Mexico 10,817
Organised by W2F , there were a panel presentations and roundtable discussions. Some kind of speed dating event with efficient networking activity. Here are some comments, classified by type of participants mobile, internet, media, advertising rather than by chronology. My take-aways : 1. Online web 2.0 services are still on the way-up but migration of users have started to appear, there could be ups and down as the social habits and demographics evolve. 2. Mobile network operators are opening the walled garden to the big brands but also partnering with ASPs, this could stimulate a value-added service creation utilizing more fully the mobile assets (location, address books, IMS enablers) 3. Advertisers and media are still cautious about mobile social networks, see it as a modest multi-channel addition to boost brands, not revenue. 4. Technology enablers are coming : widgets for user interfaces, customer analytics, and possibly as mentioned selective network enablers
Online services Sarah Gavin, Global communications director,Bebo Bebo is now the 3rd social site, with 5.8 million, Beboers and may catch MySpace by year end. Bebo's success is based on very strong engagement of users, they spend 160 minutes / month [compared with 140 minutes for Facebook and 100 minutes on MySpace ]. [ Note : Beboers create profiles, list favorites, pictures, and activities; it provides band profiles and music sharing. Beboers customize profile skins, make it public or private; to protect personality Bebo does not allow criteria search. Skype provides IM. BeboTV has 12 categories : music, sports, comedy, entertainment, animals and news. Bebo also has music from all genres. ]
David Springall, CTO and co-founder Yospace Yospace is the ASP behind 'See Me TV' user-generated video gallery offered on 3 UK and and O2's LookAtMe!. It provides MMS hosting and services. Statistics for See me TV : 13 million clips / year, reward and pricing is key. start at 10-50p. Clips are 10-30s videos (MMS). Paypal used to participate and reward. It leverages the fact that mobile users are willing to pay. Community is secondary to content gallery because of mobile UI limitations.
Roy Vella, head of mobile payment, PayPal PayPal mobile payments works exactly the same as on the internet, replacing an e-mail address by an MSISDN and password. But Roy stresses that SNS drivers have not been all about money. MySpace started as a promotion for small bands, Facebook was launched when Harvard refused to post face books on internet. Advertising money came as a result because eyeballs. Few SNS are money-centric : eBay is a community where people meet in and transact leaving feedback about people and goods.
Brands should be cautious about engaging with SNS. It ‘s a new space to thread carefully. Imagine if you throw a party and a non-invited corporation shows up ! The word of mouth can be negative if you are not contributing something tangible to the community. Half of the value is consumers’ generating content about your brand.
Tim Hussein, Head of mobile, AOL UK SNS are nothing new for advertisers and brands : message forums existed in the 80's, Coke sponsored football clubs because it's about communities. It’s no different on-line and it's common sense principle. And adds are posted where people are more likely to buy. People expect to see adds when they pick up a magazine but not in SNS which they think is private . About 16 hours usage ? he doubts it.
Mobile operators and application service providers Amer Hasan, Manager mobile internet partnerships, Vodafone global Mobile brings users a remote control of their profile in social networks. And MNOs can offer additional enablers to the ecosystems : id [authenticated] , location, handset support. MNOs can also provide value with customer care (user can call when have queries). And a range of billing options from free offering to premium service : for example MySpace for 50p. to 1.5 £./day, flat rates of 7.5 £/month,
But mobile SNS need critical mass and uniform availability across all channels. Therefore they are not sustainable as MNO proprietary offerings. Vodafone’s direction is towards preferred non exclusive partners : MySpace [MySpace mobile is wap based update blogs and friends, only known friends.- email address], eBay. Google maps. Short term exclusive agreements to provide time to promote.
Mark Watts-Jones, Head of development and innovation, Orange UK Orange interest is no more in the creation of mobile SNS products. Orange tried proprietary solutions before but realize that partnering will result in better products. Orange works with Bebo, IMS. .However it is not easy to copy internet on phones. We have to develop useful service that mobile users will use it and advertisers will come. Dead easy to say, hard to do! . About mobile UGC, you have to realize that what users are doing is SMS and messages, not only blogging and sharing : my mum do not understand blogging.
Liz McCord, Principal engineer, France Telecom R&D, UK She commented the role for IMS to provide some services to online networks, such as identity moves. I hardly heard anyone else mention IMS during the day.
Anuj Khanna, head of marketing, Tania mobile They provide ITV platforms for UGC and participation. The mobile data market is 100B$ but 80% of this is SMS . Flat rate data offers will trigger VAS on data. So far mobile users have shown a surprising tolerance to pay bad content but this will not last. Need better content. 70% may be offered free on internet and 30% charged on mobile because “this market exists”
Laurence Seberini, Managing Director, Lucky mobile Mobile banners adds are very effective in RSA. Click thru is 1:5 (because phones display only 1 add at a time), compared to 1:50 on internet and 1:100 on TV. But the CPM of mobile is al lot higher (5x online and TV) Also market surveys can be done in 24 hours using WAP forms. And we have seen instant purchasing behavior very strong : mobile users buy crap content easily.
Advertising and media Graham Darracott, Partner, Graphico New Media His opinion about mobile SNS business : Mobile is an extension of the net, and it works as an additional channel, part of digital campaign...MNOs “can't get their pound of flesh”. Consumers will always find their way around paying e.g, use Facebook for group SMS [ Some related comments here Facebook Will Win in SMS Social Networking] . MNOs have to offer , all you can eat data bundle including roaming to allow new services. One mobile issue is privacy : : SNS.are like big night clubs, “you don't give your mobile number to everyone”.
Brand must bring real [genuine, authentic] value in social networks. Brands that give something back to the community benefit. For example ordering a real Domino's pizza from inside World of Warcraft is, fantastic : you don't have to go out of the WOW environment, you only have to answer the doorbell ! [ Story is here ]. Nike in Second Life it's about how you look [avatars can acquire and wear customized virtual footware; Nike gets actual revenue for the digital shoes, gathers market research such as colors and designs and branding. Further analysis here ]. BBC brand instantly creates affinity with customers and is incredibly strong. He recommends market-research research : on-line or on the streets : spend time with people. Neil Hughston, Managing Director, Saatchi&Saatchi Interactive The development of mobile social networks will be modest. Even in Korea’s Cyworld usage of mobile is selective. Many people have up to 15 contacts in their phone address book. And many do not use applications on their handsets. Users will not pay MNOs for services, the march is towards offering pay as you go and contract tariffs choices. MNO are involved with mobile with SNS to get critical mass of customers. .
About SNS advertising, we should not mix influencers and connectors. There are different ways to measure influence and connectivity. Who is being listened to should be measured, not number of friends? Names collectors are of no value, boys collecting girl's names; unless you are a star, you are not a connector. SNS advertising is moving away from big hit big campaign and playing on passions : music, charities, events. It’s very difficult to apply to all brands. Think of Campbell Soup or Procter Gamble washing powder who have the budgets but cannot have that level of responses.
Melissa Goodwin, head of mobile, ITV ITV are not doing SNS for the money but in order to get user feedback on programs. It is a direct audience to TV interaction, that can be read exactly, they are unofficial testers, tell exactly if it's rubbish, and ITV can put our own responses. This is the most valuable reason ITV does it for now for 18 month. There is a simple way with audiences: delight them, engage them.
Rachel Beresford, Head of mobile marketing, emap Transparency of pricing is key. Integrated billing plays in favor of mobile especially for impulse buy - internet / Paypal is not as integrated. Questioned about an example of failure : Friendsters, which Google paid 13B$ but got less than 1% of the SNS market. They forgot about customers and had service quality issues : 1min to download profiles.
Technology Gero Steinroeder, head of partnerships, Nokia Widset Widset (Nokia’s widgets) is about opening walled garden, with over 80 mobile devices supported . It is all about choice as opposed to operator control, following the successful internet model where user do unexpected thing. There is a community to recommend and share Widsets, it enables users, open up services, let them fine the direction. He expects that users will primarily use internet’s add-funded model and free usage. With mobile SNS, non intrusive engagement advertising should be build as a basic part of the service. There will still be room for premium rate.
Jouko Ahvenainen, Founder and COO, Xtract Ltd Xtract Social Links is a part of of Blyk's advertising solution. Jouko explained how companies can utilize and analyze word of mouth marketing in a systematic way, recommendations are really important and are behind 71% of purchase decisions. With SNS analytics, you can analyze, understand, value the very important, players [alfa users] . Similarly, advertisers need facts and user profiles details. There is a need to optimize value chain and user experiences in mobile and internet channels . Traditional web analytics are describing only average users, Google provides only ad-hoc links based on current search context. Mobile SNS get to learn user preferences over time, not only what people tell you but detailed behavior patterns. How limitations on privacy private communities public / are there some obvious lines to draw, location
Market research Nadja Litschko, research consultant. W2F London She presented 3 segments from the Mobile Youth report ( showed qualitative recorded interviews without quantitative analysis) : • casual users 55% of total; have 100 friends (real friends) • dedicated users 35% of total; 15-35 old;have100-300 friends, most of them real; 6-15 hours usage , personalized pages, often musicians and artists • hard core users 10% of total; less than 18 years; have over 300 friends (not real); 16 hours, highly personalized pages Highlighted the trendes migration of social networks away from youth market, as user grow-up and also as the older users get on board. For example,. 75% of users YouTube are now over 25, 87% over 18yrs (compared with only 41% in 2005).
Oxford University CPD ran short courses around mobile Web 2.0 on 3- 6 July 2007, covering . • Mobile social networking, • User generated content • Mobile Web 2.0 and IMS : I attended and took notes on presentations by • Tomi T. Ahonen , mobile service consultant • Alan Moore, CEO of SMLXL • Steve Jones, 3G strategy consultant • Ajit Jaokar is the founder of Future text • Mark Searle, head of product development at Surfkitchen
Take-aways 1. Mobile social networking is already there, it’s a 3 billion $ business and can get to 90% penetration with lots of niche services to complement the big names we know today. 2. There’s plenty of potential for creative advertisers to create new multi-channel consumer experiences, while generating revenue for enterprises. 3. Collective intelligence is what powers the web and opening mobile network assets, including IMS to developers will accelerate mobile web 2.0 4. Widgets, identity management are key enablers for mobile web 2.0. 5. We need to observe better social behaviour, emotional experiences to develop successful services. 6. The walled garden model of mobile networks is slowing the development of services, there are regulatory and historical explanations to this but more openness is required.
Video sampler (so you get the energy and passion of our speakers)
Tomi T. Ahonen Mobile service consultant, he was previously at Nokia's global 3G Business Consultancy. Tomi’s book and blog cover the relation between mobile communities and advertising.
Tomi discussed about youth and mobile. It’s generation C “text telepathy” sending SMS under the sleeve using Samsung's chocolate phones. He sees SMS threads beating mobile IM because it’s so ubiquitous. Up to 100 messages/day in Korea. Tomi estimates mobile social networking being a 3.5 billion $ industry that could double next year. He gave a listing of his favorite mobile social networks including : • Habbo hotel (has 8 million subs spending 0.4 € per month), • Flirtomatic ( designed by Fjord, sending over 1 million messages a week now, on average 40 flirtograms, logging 8 times per day, and creating a side-business of romantic gifts), • SeeMeTV (over 300K GBP paid out to bloggers by 3) , • Ohmy News (3000 citizen journalists and now 7-years old). • Cyworld, obviously as Tomi’s next book is “Digital Korea” he could not avoid the example of (90% of Korean teenagers, 20 million on internet, possibly 1 million from 3G phones), • Daycare center blogging ( a day at the zoo, such as Peter Vesterbacka’s Connected day service )
Alan Moore CEO of SMLXL, Alan is a great evangelizer of “engagement marketing “. He defines it as : • Not ‘interrupting' audiences –with product or brand marketing messages • Helping businesses and customers better engage with one another. • Building customer advocacy. • Compelling content that intellectually/emotionally engages audience through multiple media channels. • Built upon the 4C's: Commerce, Culture, Community Connectivity He gaves the example of Artic monkeys, offering free tracks to audience at concerts, thanking them for their support. One other example is the “Fanta Beach” project that offered an end2end user experience around fancy urban beaches, where you play, meet, sound, dream. Although it was not launched, it is a good example of moving FCMG brand to the cultural brand of cinema or communities.
How do we apply this to mobile ? It is mostly a creative challenge. 76% of users Blyk target users say they don’t want adds but services. So we have to create a compelling experience.
“Our parents grew up with product marketing, we were raised on brand marketing and our kids live in the world of community marketing. A connected culture is a world of hot media, of Current TV, peer production, collective intelligence, Second Life, the world of Warcraft, Pop Idol, Citizen Journalism, Myspace, Bebo, YouTube, mobile social networking, new business platforms which is about utilising digital technologies to radically challenge the status quo of our industrialised world. It is all about persistent conversation and extended narrative.”
Steve Jones 3G strategy consultant and founder of www.the3Gportal.com. Steve Jones summarizes the two success factors : 1. The user interface has to be a delight (zero complexity) 2. The service should deliver emotional rewards (this is what users are looking for)
One comment was on the potential of niche communities that can ve developed by specialists “ the value of the cheese is in the holes” . Some examples include • Mobber that allow mini-communities. • Cingo for familylife • Evoca provides site to create, organize, and share voice recordings • Parental advice • Car buyers
Ajit Jaokar Founder of Future text, consultant, author of book 'Mobile web 2.0' and a well-known blogger and member of the web2.0 workgroup. During the two days, he discussed • Definition of Web 2.0 • Web 2.0 business case, • Mobile and Web 2.0 technologies • Social behavior • Evolution of publishing business as an example
1. Definition. With Mobile social networks in mind, , Ajit Jaokar proposes 7 principles of Web 2.0 adapted from O'Reilly -- What Is Web 2.0? It is about
1. Harnessing collective intelligence: “this the central principle from which all other derive” (it means blogging, wikis, tagging / ranking by communities…) 2. Web based: “double click was rigid” ( it means browser and network data and lots of long tail content or services) 3. Data inside : “re-index it, link it permanently, Google is relevant because of this” ( it combines data from NavTech, Digital Globe and serves it to mashup sites who link it with other data). 4. End of software release cycle : “ permanent new current release, beta releases with users as co-developers” 5. Light programming models ( example SOAP for B2B, REST representational state transfer, XML/HTTP, RSS, or widgets; syndicate, reuse and mix services) 6. Software above the level of a single device ( this means convergence of services on devices such as N95/ iPod/iPhone but also PCs and others – not only user interfaces but content) 7. Rich user experience “ think of Google maps” (and also personalized, context-aware pushed content)
2. Business case : . This turns into demonstrating the importance of metadata. Not the data only but what are you capturing uniquely in a transaction,. And not the users only “users will come and go” Then the question of smaller communities was raised : “ is it a race where the slower or fastest will win ? Will one end up winning or many winners? “ In web 1.0 there was no real niches but in Web 2.0 with UGC it allows niches to appear.
One question to answer is : are we in bubble 2.0 ? Ajit answers NO because • There is no IPO, M&A activity like the Web 1.0 period. • The revenue model is stronger • Application are genuinely usefull to end-users (Flickr vs. petfood.com). • The cash requirement are modest so VC funding is not so critical (hardware start-up cost as low as 20K$ unless video / audio; software from open source is free) • VCs do not expect huge losses (US funding easier UK funding in the '000s not millions ) • There is a lot of support in the business community ( see “How businesses are using Web 2.0: A McKinsey Global Survey” ¾ of executives say that their companies plan to maintain or increase investments in Web 2.0 technologies in coming years)
4. Mobile technology, How can we put Web 2.0 success on mobile phone ?. The challenge is that the mobile stack is fragmented but some open platforms are appearing. Ajit is a fan of browser technology (he’s been blogging about this )and gave some examples : • Ajax (Asynchronous JavaSript and XML so you access services from a browser without bouncing between pages, see the mobile ajax FAQ ) • Widsets (widget for Java MIDP 2.0 phones providing RSS feeds, blog posts, photo-uploading sites. Nokia has a library and templates for creation) • Opera widgets (for Opera 9 browser) • Mobile Ajax • Google gadgets • Openwave has widgets with extensions for mobile address book • iPhone API’s (Morfik WebOS AppsBuilder to develop AJAX on iPhone) • Zimlets (Zimbra "Mash-up" Zimlets) • Snocap, as an example uses widgets for Facebook and Myspace ,to embed music stores on the internet services • OpenID was also quoted as additional example here. An OpenID identity is an URL which can in turn refer to documents (FOAF, RSS, Atom, vCARD). the authentication can be implemented with Ajax . The interop is one of widgets issues as they tend to have java script but also extensions. There are other limitations but Ajit sees them winning against previous mobile development tools : • Java 2 Mobile Edition (J2ME) • XHTML • Symbian ( Forum Nokia has 1.3m developers) What are the mobile technology assets ? We need to use web to harness intelligence of mobile devices and networks • Mobility, location (call routing, handover, presence, missed calls); • Mobile content (synchronization of contacts, buddy lists, messages, ringtones, photos); • Mobile messaging (SMS, email, voice mail, IM, video messages); • Personalization (profile, authentication, directory, browser favorites), • Billing, • Some open APIs
5. The team also discussed the social side . • Are social networks a mean of expression? Or is it a distraction “we have exceeded the limits of having contacts” ? “Twitter is a loss of time “. Is it going to stand the test of time ? Are on-line participants really socials in real life ? . I quoted the papers of Kenton O'Hara where mainly social use cases have been observed [ Everyday Practices with Mobile Video Telephony]. • On rules governing social networks, were you do draw the lines for regulation? Should it be user (policing based on goodwill) or service provider monitored. Regulations differ depending on societies, religions. Habbo, Friendster, Second Life have strict rules. Mobile operators have a much stronger responsibility than ISPs. • On content : UGC cannot be stopped nor control it (example of Osama Bin Laden), content is king as long as people consume it. The changes is that consumers are no more mass media but community consumers • On issues of privacy, Ajit pointed to Kathy Sierra, “the girl with a one track mind” who fighted back privacy intrusions with the help of bloggers. On demographics, we noted that usage patterns change with ages. There is a huge movement out of MySpace,as the 14-16 generation grows-up and turns to other networks, such as Facebook) • And then digital rights issues, lawyers point of view : is there no point in going after small players but they will go after big players.
6. Ajit shared his view on the impact on his publishing business .
• The role of the editor is changing from maintaining brands to reinventing business models. Newspaper never made money was subscription , advertising was. • Communities become content editors. • Niche publishers are emerging ( Futuretext uses HP printers at Lightning source bound in softcover to print 500 copies of a book) • Marketing is evolving : Futuretext want to sell books, but it adds blogging to get references.
Mark Searle Head of product development at Surfkitchen (their main product is a mobile content publishing client software and server provisioning). He opposes the web eco-system to the mobile telecom on economic and technology levels. And he sees little future for IMS as long as it remains a walled garden.
As backgrounder, Mark suggest look at the eco-system illustration in Tim O’Reilly Meme Map and to compare with IMS the papers from the Moriana group.
Is IMS-based Web 2.0 a contradiction ? Mark Searle seems very frustrated that the issue is not so much technology but cultural. IMS has does have some of the characteristics of Web 2.0. But telecom operators are chartered with the responsibility (license agreement)to operate a reliable service compensated by financial revenues. The web developed in an opposite manner, mostly as a free service, by technocrats or hacker communities seeking no financial reward. Today, this leads to a conflict “the net heads point of view : telecom operators are trolls guarding the edge of networks"
On the technology side, creating mobile applications is VERY complex as IMS has a strong "telco" structure. “IMS has a schizophrenic view : CSCF and SIP AS are similar to IN and control oriented , …not all packets are equal"” . Today, IMS interop is not there, it is single NEP vendor-driven . Surfkitchen struggles to get web 1.0 on mobile so mobile web 2.0 will be a challenge. Mark Searle argues that 3G-UMTS is first a service platform. The big deal is not in the bandwidth (mobile bandwidth will always be limited, for example e.g. streaming/GPRS/HSDPA)but in the service enablers. The success of SMS however is quite similar to Web 2.0 in the way it opened to VASP. IMS should be transparent, naked SIP :without control mechanism.
The 4 drivers of the internet eco-system are : • Entrepreneurial culture (Skype, Google etc..) • Communitarian culture (the whole idea of web W.P, Wikis etc...) • Hacker culture (a social model, not economic, contributors looking to gain status as developers, Linux, JBOSS, Tomcat are examples) • Techno-meritocracy (Mbone started H.323, with VoIP suits began to appear)
And there are 4 phases of development in mobile telecoms: • Coverage • Quality • Price • Services (usually closed and controlled, as opposed to the web open service enhancements and competition on the user experience "History is not on the side of operators as developers of cool services.).
What are drivers for IMS ? • IMS : devices are not here. No customers are queuing two nights to get an IMS device like an iPhone • There is no user demand for IMS services. Voice is the big service, there are no data services. FMC is a big motivation for operators because of market saturation (Tispan release 7) . • Video calls perhaps “when you are in love” but no mainstream. • Simultaneous session capabilities : voice call while watching is no more subscriber growth • Synchronous network address book is a very strong capability, evolution from PAB to directory services such as Taxi, Pizza services that appear on your PAB. "There will be two battlegrounds The first screen : widgets are the way to deliver the user experience The PAB address book, linked to identity. Sxip also an OpenID supplier, proposes an identity being a cloud of attributes sources. Sxip’s CEO Dick Hart evangelizes identity 2.0 and the simple extensible ID protocol.
I with Peter Vesterbacka who made the case why Japan is an exceptional country for early-adoption of video-enabled social networking service (SNS). 1. Social networking users : 7 million, estimated 2 million using mobile 2. 3G adoption : 60 million users 3. Critical mass of mobile advertising : 50% of users, 300M$ 4. Mobile video usage is emerging
1. Social networks in Japan growing to 2-3 million mobile users Online social networks membership exceeds 7 million and expected to grow to 10 million in 2007 [Japanese Ministry of Internal Affairs and Communications]. Some examples of online services going mobile described below : - Mixi has 4.8 million users, 70% logged every 3 days, 1 million groups and and 7 billion page views /month, 3rd behind Yahoo and Google (July 2006). Mixi mobile was released in December 2006 and forecasted to reach 2 million subscribers. Mixi name refers to mixing with other, it is an invite-only network with product reviews, blogging, photo sharing, and music clone that lets you buy tracks from iTunes.. Demographics estimated 15% 17-19 (18 minimal age) and 70% 10-29. The company was founded by Kenji Kasahara, revenues around 9 million $ and IPO forecast above 1 billion$. - S! Town on Softbank is designed like a mobile 3D virtual world where avatars walks around, chats, shares photos, shops for music and video, personalizes a room, plays games. eXplo community platform from Gemini has been adopted by SoftBank Mobile in Japan; SmarTone-Vodafone in Hong Kong; FarEasTone in Taiwan; Nextel International in Central & South America; and Sferia in Poland. Gemini was founded in 2001 by Hiroshi Ota, Michael Tso and Scott Driggers, Gemini and over 20 million $ in two rounds, it is profitable. Japanese game company Bandai did the S! design. - http://www.gorotto.comfunctionality includes a blog, networking, personal profile, picture/media library, calendar and newsgroups. It has a mobile version, a GIS/Google maps mash-up feature, an open architecture for integration of other services. Registered users can invite contacts. - Love-Getty . This service was deployed in 1998 and used by 1.3 million users. I list it as a comparison point and an interesting case study. Love Getty was an oval device on a key-chain programmed the to look for others in the same mode. There were 2 sexes boys and girls looking out for each other; and 3 modes : karaoke, chat and meal. A girl’s Love Getty on karaoke mode would sound when another boy’s karaoke Love Getty was around. The inventor was Takeya Takafuji currently president senior associate of IMJ Mobile. My HP colleague Nicolas Raguideau worked on that project at the time to implement a real-time database using HP OpenCall technology.
2. 3G adoption >50 million and 40% penetration by 2007 Mid-year statistics : . DoCoMo 30 million subscribers (WCDMA) . Softbank 5 million subscribers (WCDMA) . KDDI 10 million subscribers (CDMA 1XRTT) ARPU statistics : 70 $, 65% non-voice
3. Mobile advertising reaching 60% of users with revenues of 250 million $ In 2005-2006, revenues grew 50%, from 250 million $ to forecasted 300 million US$ in 2009 (or >5$ per subscriber, on operators portals only) . This amount is similar to that of internet advertising revenues in 2000, they grew to 2 billion $ in 2006. The penetration of mobile advertising is estimated at 60 % (InfoPlant survey on usage of mobile coupons and discounts : 2-3/month 27%; 1/month 25%;1/2-3 months 20%). One of leading mobile advertising agencies is D2 Communications, jointly established in 2000 by NTT DoCoMo, Dentsu and NTT Advertising for the DoCoMo i-mode service (Takayuki Hoshuyama, COO).
4. Usage of video messaging is 9% According to Mobile marketing association the mobile usage is Mobile internet 76% Picture messaging 42% Text messaging 39% Digital music 16% IM 15% Video messaging 9% (this is low but probably 3 times above usage in Europe). Mobile TV 4.4%
Orange network evolution to 3.75G 3G video content is a success : Orange TV has 40 K active subscribers to 50 linear channels (news, video dramas,…) usage reaching 5 million mobile video sessions. The Prosumers (producers and consumers) will have a strong impact on the business models. (A refresher for my HP colleague Lam Nguyen who teaches at ENST) 2G = GPRS : 20kb/s-300kbps 120-700ms-120ms latency, 300ms-10s jitter, 2.75G = EDGE : 384kbps-1000kbps 3G = WCDMA 386kbps 175ms-250ms latency, 50ms jitter 3.5G = HSDPA 1.8 Mb/s (2006)- 3.6Mb/s (some countries) 120ms (down to 20ms) latency. 3.75G = HSUPA (in 2008) 1.2 -5.8 Mb/s Social networks(Galina Guyot, another HP collague kept her good smile during parties, despites rainy days in Spain).
Brands and recommendations are key in word-of-mouth marketing. Power is moving from institutions to communities, to social leaders, trendsetters. David Nahimini, Orange
Social Networks [month/month retention rate; Nielsen May 2006] 67% Myspace (120 M users) 57% MSN groups 51% Facebook (12M users) 49% Xanga 47% MSN space
Conversa video service One featured demo was Conversa, a mobile video conversation system created by HP Labs (Susie Wee, similing is the lab director) and HP OpenCall software. The system is designed for use with 3G mobile videophone handsets or with a client for Microsoft Windows Mobile 5.0 smartphones. It’s a hybrid of a Web 2.0 web site and 3G streaming mobile video service where users can browse conversations and record responses from any phone or PC. The web site has typical RSS video podcast support, video playback in a web browser, and an open HTTP API to support developers. Conversations with the HP Labs team are time well spent : April Slayden Mitchell, Alex Vorbau (blog), John Apostolopoulos is enriching. Check their paper from ACM's Computer Human Interaction (CHI) proceedings: Consuming video on mobile devices OpenCall Media Platform HP introduced a version of OCMP for IMS, keeping the Java and VXML APIs. It can really bridge Web 2.0 open service creation approaches with IMS service control infrastructure. (Left : my colleagues and Wade Haynes and Joe Crispo are looking at an ATCA implementation of OCMP MRF). H.264 adoption The NVIDIA® GoForce graphics processing units that can power mobile phones such as Motorola C, MOTORAZR V, Samsung, Sony Ericsson W900 etc,… They are supporting H.264/MPEG-4 QVGA encoding/decoding at 30 fps. A competitor is TI's OMAP chip driving two display (one for mobile TV and one for telephony control). [TI's estimate is 20% penetration of videophones]. OpenCall SoftDSP performs similar video processing on Intel and AMD processors. IP video phones There were a number of demos featuring fixed/mobile video calls. Here the devices from Samsung. Huawei has the Viewpoint 8x IP video phones. IP Unity was demonstrating their Mereon Video mail using IP video phones. The target are business customers but I don't know what the market reaction will be to these devices.
Blue Ocean strategies in telecom from around the world
The content, information and opinions shared on this blog are mine and do not reflect information from my current customers. Claude Florin. claude@florin.ch
Tony Fish, CEO, AMF Ventures & Author, “Mobile Web 2.0” presented the opportunity in monetizing the mobile digital footprint (user profile and behavior ). The new world focuses on the [UGC] creation side and posting mobile content to the web. Advertising revenues complement value-added service charging models. This is a transition from the old world mobile industry focused on consumption, centered on payment for services, applications and content. But thee new world will not wipe the old word it will improve it.
Paul Goode from m:metrics confirmed the success of SMS advertising campaigns with 50% of EU and 20% of US subscribers having received messages. He estimated mobile media audience being 25% of all EU5+US subscribers (~ 106 million, > 6% growth) with a >3X greater usage by the 10% smart phone users (~ 37 million, 0% growth). The biggest growth is seen in social networks, used by ~ 4% of subscriber spending 1:30 hours/month on facebook.com or myspace.com, ranked in the top 5 visited sites. US now leads over Europe in mobile media consumption and web access : Americans spend 4:30 hours/month browsing, British spend 2:25 hour/month. Demographics show 45% of 28-30 year old with the biggest usage of mobile content. On the topic of smart phones he noted that N95 outsold iPhone 1:2, the iPhone being bought by those who can afford it. 
Anders Elleby, Swisscom Participation : innovative services can be launched with devices such as the Ogo2 devices adopted by (~100’000?) Swiss teenagers who can connect to MSN IM, call and now browse the web. Also mentioned, Starfruit virtual phone booth in Second Life allows SMS and offering flowers to the real world. In general MNO can innovate with network enablers (for all access networks), device applications (despite the fragmentation of platforms) and overall services, rather than focusing at declining premium content revenues. 
