Website Trafficking

The evolution of digital media has brought an amount of content and audience fragmentation. This had been the advantage of internet advertising which provides highly targetable marketing and/or larger audiences at cheaper rates.

One way of getting the inside look into specific audiences that traffic websites is Quantcast which delivers audience profiles inferred from directly measured website traffic. The company ended up receiving $20 million in venture capital at the beginning of 2008, on top of the original $6 million in seed financing.

This website is a great publicly available way to gain a perspective on what kind of an audience a website is attracting and the amount of traffic it is receiving relative to other websites. Its quantitative approach can lead to a more relevant audience profile than the previous panel-centric method.

Most importantly of course, it’s free.

Technology Free-Riders

The financial thesis of representing increased volatility as increased risk is an apt consideration in looking at the current happenings of the market, but also the web. Along with this increased risk comes the enlightened idea that the commercial potential of the net still remains largely untapped.

The first flash of instability came in the explosive first-day gain of Netscape. Set to IPO at $14/share it made a $61 jump within the first day. With its goal of the commodization and leveling the playing field among operating systems Netscape was turned into a force that would end in a $4.2 billion AOL stock-swap valuation – only later to drop off into a part cyberspace antiquity.

Although early internet rebels foreshadowed a commercially driven arena, one of the surprising developments of cyberspace has been the manufacturing of the web through users rather than by corporate interests. While it was commercial interests that facilitated the space, its product has turned into a huge and organic positive externality. We are all free riders surfing this electronic wave.

Either way you see it, what has happened with this computing network hasn’t been in anyone’s ten-year plans. A seminal figure in the history of the internet, Ted Nelsen, envisioned a world of utopian benefits that would save us from our stupidity; obviously we are still a long way.

While little technological fetishism is okay, too much and you risk romanticizing the future possibilities instead of taking responsibility for them. As architects and consumers of the internet space, we are all leaders that gain a following by sharing. While a second-grader in 1993 could have imagined the year 2000 in a time capsule, to be a world of flying drag-racers and skateboards, we have to brace ourselves for something different, but also some of the same.

Tip Towards Buyer Power

The proliferation of the internet and related technologies has certainly altered the balance of power between businesses and their customers. It is undeniable that in the current shake-out a variety of business industry structures have changed for good or are in the process. There is even reason to suggest that the larger and traditionally safer investments might now be facing the strongest challenges.

As Fred Wilson warns in a recent blog post Is There Such a Thing as a Blue Chip Stock Anymore? instead of the previous structured economy that was developed in the 19th century the new economy is “global and driven by information and technology.”

The name “blue chip” is derived from the poker chips that have the highest value. With GE and GM trading below $10 per share, just how much into perpetuity can the elite and established firm’s future dividends be assumed to reach? Just how valuable can they be assumed to be?

Of course, the situation needs to be looked at on a case-by-case basis. But it seems that in this troubling economic time, firms driven by technology are those nimble enough to take action and model themselves to a new set of criteria. In Adapting Marketing to the New Economy the authors mention technology as one of the drivers behind this new economy. With an ability to pull out a blackberry and purchase whenever and wherever, the Porter approved force of buyer power has grown across the business horizon. Customers are catching on, comparing notes on products and services, looking up housing prices, music, consumer reports, and checking movie ratings and trailers before going out (when the rated numbers are high enough and a movie is given a C, I probably won’t see it). The most enthusiastic people I know about internet technology are my grandparents who constantly use skype to make overseas calls.

There will always be a role for companies that deliver products and/or services with economies of scale and scope, and with already established access to financing and capital. These advantages are just too great for a smaller firm to directly take on.

The opportunity for a smaller firm comes in its ability to differentiate itself. A solution can be presented to a global marketplace for dirt cost; that is something hard to compete with.