BSEC: Tim O'Relly

Impressionistic transcript of Tim O'Reilly's talk at Buying and Selling eContent:

Similar to open source, Web 2.0 is about collaboration.  Companies that are information businesses, software as a service, the internet as a platform and are harnessing collective intelligence.  Yahoo as the ultimate content aggregator. Google's PageRank studies links, not just documents. eBay has 800k people making their living online. Amazon has more than ten million user reviews. 

Only a small percentage of users will go to the trouble of adding value to your applciation, therefore set inclusive defaults for aggregating user data as a side-effect of their use of the application.  Cornucopia of the Commons -- people building a database as a byproduct of using it, where the default is to share.  Flickr drives people crazy who work with formal taxonomies, but look at what you can do with it, the user innovation.  Shows Alexa comparison of Shutterfly vs. Flickr and Wired.com vs. digg.  Postgenomic.com.

Asynmmetric competition: competing with people with no business model or a different business model.  Encarta was a $100M business that destroyed one 10x larger and now comes in Wikipedia and Google.  Is Harry Potter a book, or an imaginative entertainment.  World of Warcraft is competition. Craigslist has 19 employees and is disrupting those with thousands.  The PVRblog makes more money on ads at $4-5 per click than I could pay him to publish a book.

The perpetual beta, when devices and programs are connected to the internet, applications are no longer software artifacts, they are ongoing services, therefore do not package up new releases into moolithic releaseas, but instead add them on a regular basis as part of the normal user experience. engage your userrs as real-time testers, and instrument the service so that you know how people are using it.

The PC is no longer the only access device for internet applciations, and applications that are limited to a single devcice are less valuable than those that are connected.  We have a lot to learn from iTunes, a three tier app from handheld to cloud to pc as control station. (personally, I think iTunes could learn a little from the Cornucopia).

Data is the next "Intel inside" where applications are increasingly data-driven.  Therefore, owning a unique, hard to recreate, data set gives you leverage.  Navteq as the data inside for Mapping, Digital Globe for satellite data, Gracenote for music applications, NSI for the registry monopoly (a lock point for value, despite Esther's efforts with ICANN).  1 Billion songs in a proprietary file format.

A platform beats an application.  Two types: one ring to rule them all or small pieces loosely joined. I'd like to see the latter survive for Web 2.0.  Housingmaps.com as an example that leverages data in mashup, shows the value of other platforms. 

The CD Burn-o-matic made Napster possible, huge difference with the eBook market.  The InternetBookmobile solves this problem.  Shows Safari, if books are used for reference, searching a library of books is what people need.  As you are reading, there is a See Also of related content.  SafariU lets you roll your own textbook.  RoughCuts, a wiki-based front end for collaborative authoring with subscription access to see it being developed.  AuthorsCut, EditorsCut maybe even ReadersCut to come.

In the content business, we have to learn to let go.  A lot of what we have done successfully is to open our content, and get benefits from that.  The Long Tail of Safari use has spikes near the end, where people have found new uses en mass.  This shifts the demand curve.  Books that produce 6% of sales produce 23% of Safari usage.  In the top 10k computer books, 27% of views from books delivering 2% of unit sales, 47% of views from books delivering 9% of unit sales.  Search really does drive discovery.  This is why the Google Library project matters.  The number of books commercially exploited by publishers is 4% of those in print, 20% are public domain and 75% are orphaned works.

Make (described by Steven Levy as Martha Stewart for geeks).  90k paid circulation in 12 months, newstand sell-through of 60% (30% is industry average).  How did we get noticed?  We leveraged the consumer internet.  Find a parade, get in front of it.  Buzz Marketing demands a movement; a story.  Communities make better stories than magazines.  We celebrate characters, not products.  Follow the conversations, blogged like no tomorrow (3k posts in the first month), let readers submit ideas, Flickr phots, Google Video.  Digital distirbution is key to ubiquity, a free offering.  Diversified media: site, blog podcast, video, rss, IM  bot, SecondLife, in-person events, Maker Faire and local Meetups.

"I'm an inventor.  I became interested in long term trends because an invention has to make sense in the world in which it is finished, not the world in which it is started." -- Ray Kurzweil