Entries from March 2010 ↓

I’m at the 140 | The Twitter Conference and Ben Parr (@BenParr), Co-Editor of Mashable, is sharing his thoughts on social media with Steve Broback, (Host of the conference).

Here are some highlights:

The top three social media platforms business should care about:

1. Facebook
2. Twitter
3. YouTube

Two newer social media platforms to keep an eye on:

1. FourSquare — It’s a mobile application that let’s people know where you are and what you’re doing.
2. Google Buzz — It’s already bigger than Twitter in terms of users (at 40MM+).

Upcoming Changes In Google Buzz

If Google doesn’t create a standalone version of Buzz, it won’t succeed.

You will see Google Buzz withing Google Apps/Google Docs within the next few months.

“I’m bullish on it — it has strong features and big user base. I’m getting better engagement on Google Buzz than Facebook.”

Google Buzz API is coming — Google will throw APIs out like they’re candy.

Twitter’s Ad Platform

Twitter’s plan is to probably launch an ad platform this month, probably focused on search. This will probably involve in-stream ads and developers to integrate it and share revenue with it…so applications (such as HootSuite or TweetDeck will carry ads).

Twitter is cash-flow positive due to the “Firehose” (allowing Yahoo, Google, Bing and 6 or 7 search startups to index the Twitter content/data).

Tips & Tools For Businesses Use To Maximize Value of Twitter

• Figure our your goal (have a specific goal in mind). Examples of goals: Monitor discussion, promote products, build a stronger brand, etc.
• Recommends these tools for businesses: CoTweet, HootSuite and WildFire (whatever tool you use, make sure it has analytics)

iPad

The second version of Apple’s iPad will likely include a camera.

I’m sitting here at the “140 | The Twitter Conference” in Seattle, WA and Jason Preston of Parnassaus Group mentioned these two tips for growing your followers on Twitter:

Contests

“Contests work” — Offer a prize. Ask people to follow you and retweet the contest.

The cost to acquire a Twitter follower has averaged about $7 per 100 followers in Preston’s experience.

Twitter Contest Examples

Jason said Parnassus Group used a contest for what the t-shirt for a Twitter conference should say (with the winner being offered a free conference pass and t-shirt).

As part of the contest, you had to tweet your submission and follow the conference the twitter account (@tweethouse).

Parnassus got a couple of hundred followers as a result of the contest (which again he says worked out to about $7 cost to acquire each Twitter follower

Another example: Someone offered a MacBook Air and got 2,500 followers (that cost to acquire a Twitter follower was closer to $1 per follower)

Follow People Using Tools Such As TweepSearch

Searching for people who are relevant to you or your business (based on location or products) and follow them. Reason: There are a lot of people who have their accounts set up to automatically follow you back.

If you’re targeted on your outreach you will land on the inbox of people interested in your business. He recommends TweepSearch (in beta).

With TweepSearch you can type in search term and easily find people to follow (and then hopefully they follow you back). If you’re looking for followers from a certain location, type in the search term followed by the location (e.g. “Jewerlry: San Francisco”)

I’ll keep posting other info from this event.

I finished a few books on my trip to Europe last week and one of them –  Free by Chris Anderson — was chock full of stats that I found myself dog-earing throughout my flight.

“Free” is a must-read if you’re passionate about the Internet, or just business in general.

I’m gonna keep this simple and just list out some good nuggets (which are mostly stats).

Let the “freeconomics” begin!

The “Freeconomy” Is An Estimated $300 Billion Market

The Free Economy is roughly a $300 billion per year market.

By his own admission, Anderson defines this loosely, including revenue generated from businesses driven by giving away most of their products or services (e.g. TV, Radio, online advertising Web sites, etc.).

Two sub-economies have emerged in place of money on the Web (though they can later lead to money)

1) Reputation Economy – This is best measured by Google’s PageRank which rates on a scale of 1 to 10 how important each Web site (and each page on a Web site) is, according to Google’s secret algorithm.

2) Attention Economy – This is best measured by the traffic a Web site receives (traffic being measured by number of visitors and page views)

To calculate the Economic Value of your Web site (i.e. how to help turn your Reputation & Attention into CASH), Anderson suggests this formula:

(The traffic your page rank brings from Google’s search results for any given term) X (The keyword value for that term)

note: while he doesn’t clarify how to calculate “keyword value,” I’d suggest you could use AdWords.Google’s CPC)

General Web Statistics Related to Freeconomics

• The net deflation rate of the online world is nearly 50% (whatever it costs a business to run a Web site now will cost half as much in a year).
• The Web has around one trillion unique URLs, according to one Google estimate
• There are 12 million active blogs
• It costs around $.25 to stream one hour of video to one person (a year from now it will likely be around  $.15)

User-Generated Content Statistics

• Around 1 in 10,000 Wikipedia visitors are active contributors.
• YouTube has around one in a thousand users uploading their own videos (meaning the rest are just downloading (viewing) videos
• Most online volunteer communities thrive when just 1% of them contribute

Two Cool Social Media Statistics

1. The average number of friends for MySpace members is around 180
2. Facebook applications receive around a $1 CPM ($1 per 1,000 page views) for advertising revenue.

Interesting Free-Related Trials & Experiments Anderson Mentions

The Case of $.15 Cent Truffles Versus Cheap to Free Hershey’s Kisses

Dan Ariely (Predictably Irrational) took two kinds of treats: Lindt truffles from Switzerland and Herhey Kisses and offered them for sale to students:

When they priced the Lindt truffles at $.15 and the Kisses at $.01

• 73% chose the truffle
• 27% chose the Kisses

When they lowered both prices by $.01 so that the truffles were $.14 and a Kiss was free

• 69% chose the Kiss

Conclusion: While both products’ prices were lowered by the same amount ($.01), the introduction of free as an option reversed the students’ preference.

How Does “Name Your Own Price” Work As A Business Model?

Matt Mason, author of Pirate’s Dilemma, allowed visitors to his Web site to name their own price upon checkout of downloading his ebook (with $5 via Paypal as the default option)

Results: 6% of the 8,000 people who downloaded the ebook agreed to pay an average of $4.20 each (generating a couple of thousand dollars) (interesting note: Mason estimates he received $50,000 in lecture fees as a result of the publicity of his exercise).

Hope you enjoyed some of these freeconomics!

I heard a cool thing listening to a GetAltitude interview of Brendon Burchard by my business partner Eben Pagan in my car this week– Brendon mentioned four things an expert needs to do to be successful.

I love frameworks so I’ve listed the four items that Brendon mentioned below along with my take on each.

Listing just the framework felt dull so I decided to give an example of each step using the topic of “Social Media? (since Social Media “Experts” are high in demand these days).

Enjoy!

Four Steps On How To Become An Expert:

1) Tell People What to Pay Attention To

An expert needs to break down the abundance of information available to most people into just a handful of key bullets.

For example, if you’re an expert social media, you might suggest to your listener that the four social media tools to focus on are:

• Facebook
• YouTube
• Twitter
• Your blog

2) Tell People What Things Mean

You need to tell customers what things mean and why they are important.

Continuing on the Social Media example, you would tell your audience that social media is critical to their business because it can generate half of their Web site traffic.

And this traffic can be unpaid (i.e. you don’t have to pay direct advertising costs to do it).

3) Tell People How Things Work

Experts should focus on how different pieces of something work…as well as how they all work together as a whole.

For example, you might tell your customer that the different Social Media platforms work in the following ways:

• Facebook helps your business by allowing you to offer product launch information and discounts to your Facebook “Fans.”
• Twitter is most useful in terms of listening to what users are saying about your brand and having a conversation with them when appropriate
• YouTube can help grow your business through a channel you create with Web video commercials
• Blogs are most useful for your business as a content delivery platform through which your team shares medium-length content about the direction you see your business and industry heading.
• Overall: All four of the above can work in concert with your blog acting as your centerpiece promoting your Facebook Fan page, Twitter address and URL for your YouTube videos.

4) Show People The Future

A good expert shows their audience the future.

E.g: You can tell your audience that you predict that their Web site will have the following as the top five traffic sources by the end of 2010 if they follow your advice:

1. Facebook
2. Google (the current #1 traffic generator for most Web sites)
3. Twitter
4. Blog
5. Facebook

If you work on these four things, there’s no doubt you’ll improve your reputation as an expert in your field.

Thanks for the idea, Brendon!

It’s amazing how much momentum Facebook is generating these days. The press is certainly going wild.

Earlier this week, InsideFacebook shared some revenue estimates.

Based on their estimates, as well as one mentioned in the Wall Street Journal today and past ones from Starup Review and Don Dodge, here’s a very rough estimate of Facebook’s revenues since its founding in 2005:

Facebook Revenues for 2005 to 2010 (Estimated & Projected)

Today’s Wall Street Journal cover story had these highlights about Facebook:

CEO Mark Zuckerberg’s Management Style

• He is short on praise and believes that getting the product right should be its own reward
• He is clear and purposeful on vision: believing that Facebook’s promise has to do with facilitating people’s ability to share almost any and everything with anyone at any time via Web sites, mobile phones and even videogames
• He is a micromanager
• In Facebook’s earlier years, Zuckerberg ended meetings by pumping his fist in the air and leading employees in a chant of “domination.”
• Zuckerberg believes he has a special capacity for delaying gratification (and that will be helpful in holding out on an IPO)
• Good listener: He’s met with Intel CEO Paul Otellini and Oracle President Charles Philips and keeps a long list of advice on his Blackberry
• Zuckerberg controls votes for three of the five board seats

Facebook passed up on two acquisition offers:

• Yahoo’s $1 billion offer in 2006 and
• Microsoft’s offer of $8 billion or more sometime later

Facebook Financials and an IPO

• Facebook’s revenue could hit $1.2 billion to $2 billion this year (2010)
• It has been cash-flow positive (enough to pay its 1,200 employees and overhead) since 2009
• Timing of an IPO: Board member Jim Breyer told a German audience last month that an IPO would not happen in 2010

Zuckerberg is clearly in control of the business

• Zuckerberg owns more than a quarter of Facebook’s stock
• Zuckerberg has control over 3 of the 5 board seats

I expect Facebook’s press to escalate further leading up to a likely IPO this year or in 2011; in what would likely be the largest Internet IPO since Google.