strategy+business is published by PwC Strategy& Inc.
 
or, sign in with:
strategy and business
Published: November 30, 2006

 
 

Best Business Books: Media

Facebook.com, the subject of Mr. Cassidy’s article, is a Web site for personal pages created by college students. It began in February 2004 at Harvard, and within seven months, it had a quarter of a million users. They were the kind of people advertisers dream of: bright, young, educated, sophisticated consumers of media and technology. The key elements of Facebook’s appeal seem to be access to information within a sense of community and privacy. Because only college students have access to the site and because participants have control over which of their items are public and which are for approved friends only, Facebook users feel safe. Instead of finding people with whom they share a dorm or a class, students can find fellow vegetarians, reggae fans, or Republicans. However, Facebook’s growing pains should be a cautionary tale for anyone hoping to replicate its system. Some students post photos of parties that include classmates who are not happy to have those moments made public. And the open-to-anyone policy of Myspace.com has led to concerns about predators who have contacted minors through the site. But, as Mr. Cassidy notes, these networking systems tap into people’s need for connection in a way that MSM never could.

The real cautionary tale, though, is the story of Craigslist, an 11-year-old service for posting classified ads for jobs, apartments, used cars, etc., as well as personal ads and restaurant recommendations. It is free to use, except for help-wanted ads in three cities and apartment ads in one. Craigslist is intentionally low-tech in look and easy to use, traits that are an essential part of its credibility and identity. The paradox of Craigslist’s success is that founder Craig Newmark does not care about money, which is why the site’s users trust it. Craigslist, which is based in San Francisco, costs very little to run, and Mr. Newmark already has plenty of money from previous dot-com success. Even if he were interested in selling the site, the sale itself would damage the brand’s most significant identifying factor. How can MSM compete with that? Not easily. Craigslist.com gets more than 3 billion page views per month, ranking it seventh on the Net. And, according to Mr. Weiss, Bay Area newspapers are losing as much as $50 million a year in classified-ad revenue to Craigslist. The issue here is not whether Craigslist will make as much money as it could if maximizing revenue were its goal. The issue is how Craigslist prevents other businesses from maximizing revenue. It does not matter that competing with MSM for classified-ad revenue is not a priority for Craigslist; the fact is that it does, and very effectively.

Still, there will always be a market for professional media. YouTube.com, the site where anyone can post short videos (and which was purchased in October by Google), may showcase footage from international conflicts alongside college students lip-synching in their underwear, skateboarders crash-landing, and babies laughing, but people still want to get news from those who are established as trustworthy and knowledgeable, and entertainment from those who have talent and charisma. For advertisers, the challenge will be to find a way to take what marketers have learned from consumers and what the consumers share with one another to deliver information to the people who are most interested in it. For content providers, the challenge will be to find a way to make consumers feel involved and connected, to help them find a sense of community, to let them participate, to take the best of what they contribute and help them communicate it to one another and the world. (Those lessons should be on full display in what promises to be next year’s most influential book: Wikinomics, by Don Tapscott and Anthony D. Williams. The book’s subtitle, by the way, will be determined by visitors to www.wikinomics.com, a superbly wikonian example of form driving content.)

 
 
 
Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store