$$$ (Original #2)

Social media is used for more than the furtherance of brands. Social media websites are brands unto themselves and owners of these sites are beginning to sell them to make money. They use themselves to create value.

The Huffington Post is selling for $315m. Twitter is valued at $3.7b, may have been offered $500m by Facebook in a sale proposal, and  is seeing JP Morgan look to use some of its growth fund to acquire a 10 percent minority stake in the company. Facebook has been valued at $50b and Goldman Sachs has invested $450m while trying to attract another $1.5b from investors.

Where does this money come from? How are these sites able to make enough money to justify the billions in value and millions in investment? Twitter is expected to post $50m and Facebook $2b in revenue for the 2010 financial year, while the Huffington Post earned $30m, presumably from selling ad space. Twitter has an uncertain revenue model but has a rough plan to make money off "Promoted Tweets," or tweets that will be more prominent under certain search terms (it reminds me of Google adwords). Facebook's revenue model is a multi-faceted one based on ads, applications and credits. An attractive graphical explanation of Facebook's model can be found here. Given that these sites are expected to grow, it seems reasonable to assume that large investments can be recouped and profits made after a couple of years.

However, these profits haven't yet been justified. As the companies are private, there is no public and definite proof of revenue. More important though, even if the figures above are correct, these companies may be overvalued. Facebook for instance, is trading shares without being a public company but those shares are trading at 25-30 times its annual revenue, so that the writer of the former link declares it the most overvalued company and calls for us to remember the tech bubble and Amazon's steep devaluation. As the writer of the latter article says, the secondary markets on which these values are being determined are mercurial and prone to trendy exaggeration. Oh, and that writer also says that Twitter may soon be traded at 45 times its annual revenue.

So where will this go? Personally, I don't see how Twitter could be worth billions off an adwords-like option alone. Facebook is certainly innovative but what it offers seems to me to be so disposable that its pay-for-service features will always be on the precipice of relevance. As for the Huffington Post, read my post on it to see why I think readership (and therefore ad revenue) will fall. But none of this is to say I don't think these companies are worthless. I just think they are benefiting from the financial world being taken with the latest fad.

Do you think these companies are - or could be - worth as much as they are believed to be worth?

The Mess on HuffPo (Original #3)

It seems to me that the current trend in design is to keep things simple. We are bombarded by so much information that it is important for organizations to tell us exactly where to focus and to keep multiple ideas conveniently organized. For example, Barack Obama's presidential campaign used simple and sleek designs, like the famous "O," as well as simple words and phrases like "change," "hope," and "yes, we can."

Social media in general tends to embrace simplicity, with strict character limits on tweets and the easy white and light blue of Facebook. What comes to mind is Jesse Eisenberg in "The Social Network" saying "nice and simple" (or something like that, I saw the movie a while ago) when explaining to Eduardo why the soon-to-be-launched Facebook relied on minimalism of design. I also think of Twitter's character limits that reduce all thoughts to the bare minimum, at-replies and hashtags that rely on old short symbols to add an entire layer of context, and the icons websites like Digg use as buttons on webpages to reference those webpages on said websites. Simplicity is key in today's world and social media has naturally picked up on (and driven?) this trend.

So it confuses me that the Huffington Post has such a messy homepage (at least in my opinion). The first thing you see when you click onto the website is usually a large headline and picture about the latest development in whatever issue is currently trending. It is harsh and very in-your-face, where Twitter and other popular sites tend to be quieter.

Then you notice a jumble of text under the picture and your mind doesn't know where to focus. As you scroll down, you see three columns, only the leftmost of which seems to have a unifying theme (featured writers and/or posts). The other two cover a plethora of topics, and again there isn't an obvious place to focus. In general, the page seems messy and I think that is unappealing.

Now, it would seem that I am wrong in saying that this is a big problem, given that the Huffington Post is so popular. It is considered one of, if not the, most popular political website and just sold for $315m. However, an audience profile reveals that HuffPo is increasingly popular as you move up age demographics. In fact, 68% of readers are 35 and older and only in the 35-49 and 50+ age groups does HuffPo exceed total internet population. To me, this means that it is older readers who are driving the site's popularity and that the site may have an uncertain future as it struggles to adapt to emerging reader proclivities.

Given that blogs are declining in popularity and that people increasingly have shorter attention spans that make it difficult to even read moderately length-ed  online articles, those who run the Huffington Post may need to temper their expectations for HuffPo and determine whether they even want to bend to the demands of emerging consumers. I think that if they do want to bend to those demands, they should start by redesigning the homepage.

It is important to focus the attention of people bombarded with stimuli and organize information presented in an increasingly complex and stressful world. Other blogs, like Daily Kos, are neater. I personally like the design of The Atlantic Wire and SB Nation. The Wire is clean and simple and both websites are well-organized, avoid excessive clutter, and ensure that you always know the theme of the column you are looking at.  It may mean reducing the number of features but HuffPo may be wise to trim around the edges and look more like one of these sites.

Do you think HuffPo should change its look?

Balancing the Formal and the Informal (Reflection #2)

I feel that the reading didn't delve into how to regulate use social media. I don't think it went beyond stating that it is very useful and it seems to me that using it effectively is complex. What I wonder about the most is how companies trying to use social media balance the informality of the medium and the formality of being a professional organization. A big reason for the popularity of social media is its democratizing effect, where the relationship between entities becomes more familiar and consequently less formal (or possibly it's the other way around).

However, large organizations such as the New York Times or even Twitter must appear professional so as to avoid alienating segments of their audience. By doing so, they may be less appealing to some but at least they are not driving others away. For example, and similar to Lesley's point, Tweeters such as Shaq can harness informality in part by taking grammatical liberties but organizations like the Peace Corps or Starbucks cannot. Of course, organizations are also inhibited by the need to stay on-message.

I think news organizations have the easiest time with this because they can simply tweet recently released stories and employ bloggers to write more opinions. The New York Times, for instance, tweets only news stories while having some of its better-known journalists maintain Twitter feeds. The latter is a way of providing breaking news and allowing people to follow specific journalists who interest them, i.e. Nicholas Kristof, and the former creates a place for the loyal reader to find a simple and organized list of the latest pieces to read. The NY Times also employs people who write only online pieces (or people who write both online and print pieces), so that their opinion section is more substantive, easier to lose yourself in, and generally more engaging.

It gets more complicated with companies like Dell, which primarily engage with consumers through product sales rather than something like writing, which is inherently more personal. While there was still an opportunity to benefit from the "groundswell," while Dell realized, as the authors point out, that "authenticity was crucial," (pg. 211), the organization still felt a need to "delete [comments] that were considered inappropriate" (pg. 204). This top-down regulation presents the risk of negatively impacting authenticity, especially in an environment where managers "aren't used to sharing at that level [of transparency]" (pg. 209). One might worry, for example, that his/her company will miss its "flaming laptop" moment for fear of over-exposure or filter a comment like Jeff Jarvis's for offensive language.

I know that companies have a need for formality but I would have liked for the authors to delve deeper into effective ways of dealing with such issues. For example: what rules might a company put in place to regulate comments and commentary so as to filter useless and/or offensive opinions without missing a "flaming laptop" or "Dell hell moment?" Such questions seem to me to me to be present but never answered in the chapter.

Un-cluttering Clutter

Basically what this is about: My continuing effort to add useful widgets and pages to my blog while maintaining simplicity. Please read, let me know what you think, and provide suggestions, criticisms, and comments on what works. I'm learning as I go and certainly hold no illusions as to my ability to build a blog.

I have been working today to increase DWG's reader retention and improve reader experience by adding widgets and other features. It has been pretty ad hoc because this is my only experience with building blogs or websites.

My fear of low reader retention is due to my preference for limiting my posts in order develop my opinions before posting them. Not only is this how I prefer to write, but I feel it enhances the quality of my posts. The drawback is that posting infrequently probably hinders reader retention; my blog probably does not stay on people's minds the way that it would if people could be in the habit of checking it every day or so.

I feel the features I add are important also as a way to enhance reader experience by creating a pseudo-website as opposed to a list of opinion pieces. While the posts are certainly the centerpiece of the blog, I think that - in a way I have yet to find the words for - adding features makes the blog feel more substantive. To me, it seems less amateurish with the right features and feels more like a place to spend time as opposed to passing through on a web surf.

The drawback to having more features, however, is that I run the risk of cluttering the blog and creating a situation where readers cannot focus. I find that a lot of major blogs do this, including the Huffington Post. Although these blogs are popular, the sheer volume of information that must be sorted on the the first page alone can create confusion and indecision. Simplicity is key to design these days.

The Responsibility That Consumers Must Now Accept (Response #1)

I think it's amazing that people are better able to communicate with companies. Social media is a great social equalizer and a great way for people to get what they want. Companies decreasingly have to guess at what products will sell well and increasingly can simply ask the consumers, while consumer complaints are now more effective. 

However, while we celebrate the groundswell, we do not ask whether we who comprise the groundswell must now embrace greater responsibility. Because successful companies will give us most of what we ask for, there is a risk that we will embrace the ability to box ourselves in more and not consider anything beside our first wants. With M.D. Anderson, for example, I was first glad to hear that a hospital had finally decided to address wait times and happy that an ordinary patient could harness such power. It seemed like a victory of the person who matters over the cocky doctors at M.D. Anderson who are probably so taken with themselves that they feel all patient complaints are crude and baseless.


Then I began to wonder whether Mr. Perry was himself being a bit selfish and thoughtless by forcing M.D. Anderson into a situation that could cost it (and other patients) valuable equipment. Possibly, doctors and M.D. Anderson could become more stressed and overworked, or patients could find that worse care is taken of them, because of an increasingly myopic focus on wait times. Thinking a step further, will patients then complain about these consequences and what will M.D. Anderson do about it?


The reality is really somewhere in between, where the "groundswell" simply brings with it new risks - like any new movement - but I feel that the question of what responsibilities consumers take on with their newfound power is not addressed effectively in the book or in general societal debate. Because this trend is so new, it is probably natural that this question not be answered because we are in an initial euphoric state. The optimal result is that social media develops more as a conversation rather than as a way of listing demands, so that consumers can refine their requests and understand the consequences of such requests. This would be the most democratic and wonderful use of social media as a marketing tool.

A cry for help: How I started using Twitter and why I still don't get it

Over the summer, I was heavily encouraged to start a blog. People I knew were tired of my incessant monologues on politics, society, sports, and anything else that crossed my mind. Since some think that I am a good writer, a blog seemed like the perfect outlet.

I did start one but I quickly realized that simply writing stuff online wasn't good enough to disseminate my opinions. I needed an attractive design, an understanding of search engine optimization, and a willingness to tell everyone who would listen that I have a blog.

For a couple of months, I contented myself with building a base of blog posts and telling a few people. Hopefully, word would spread and I could bide my time until a larger base would find a consistent posting schedule and a number of blogs to read on the first visit.

What never crossed my mind was using Twitter. It seemed like the place where celebrities and nobodies alike got to give a synopsis of their latest meal or tell me how much they were spending on clothing. I didn't care about it and never thought about it.

That is until one day, when I was browsing the web and realized that a good hook could be posting links to thought-provoking or funny articles. My blog is, after all, dedicated in part to the defense of original ideas. Having realized that I wouldn't be posting more than about thrice a month, I wanted a weekly synopsis of the most interesting articles I found online.

However, I wanted to go beyond that. I wanted to have a something or other that was updated almost daily, so that my blog felt more "alive." And so, I remembered Twitter and its incessant updates. I realized that it had uses beyond updating me on Kanye's latest ego trip. I began posting links to articles as I found them and basing my weekly synopses off of those Tweets. I became a Twitter user.

Now, I think my blog's Twitter feed provides an important element. In the absence of frequent posts, it is something that people who like my blog can rely on for frequent updates. To maximize this effect, I put an abbreviated version of my Twitter feed on my blog so that people may visit the blog more often. I also tweet when I post something new, so that those who choose to follow on Twitter will know when to go to DWG.

However, I am still not entirely familiar with Twitter. I really just Tweet links and descriptions. A number of people have followed me and then disappeared, which I assume means they un-followed me. I'm not sure why this is but all these people follow over a thousand other Twitter feeds. Am I supposed to follow everyone who follows me? Should I follow random people so that they follow me?