We appear to be entering a phase of the Internet where the major players have surfaced. Don't get me wrong, I believe others will emerge, but I think the days of needing to create a website to have a presence on the web are gone.
Players such as YouTube, MySpace, FaceBook, and many other mega-sites have millions of users. These same sites are starting to attract developers by offering APIs. These APIs allow developers to create small pieces of functionality (a.k.a widgets) which users of mega-sites can download and plugin with only a few click, thus enhancing their online experience.
The appeal for a developer to create a widget is great. In a matter of weeks you can take a general idea, develop a small piece of functionality, and put it to market where it can be exposed to millions of potential users. Beats the hell out of the old web model of building a website, crossing your fingers, and hoping the search engines brings you some traffic. Plus, it keeps developers from reinventing the wheel. Instead, they are finding ways to make the wheel roll smoother, look better, turn faster, etc.
I'm a fan of widgets. I think they are fun and I've actually plugged several of them into my blog. However, I didn't pay for any of them, and I don't see any blantant advertising being done by them.
So it leaves me a bit confused on how they make money???
Recently I was reading Brad Feld's blog where he was pimping developer job openings for one of his portfolio companies call J-Squared. I'm not a devote follower of the company, but the claim to fame for the young company is that they have created a very popular widget for Facebook.
Apparently these widgets are able to make money. I'm still confused as to how???
Do people have to pay for these widgets (ie. $0.10/download)? A dime a download is nothing for a single person to spend, but multiply that times a million downloads and things get a bit more interesting.
Is it advertising? I see that as a viable means, but the more ads that start popping up on a users browser when they install widgets could be a downfall (ie. I install 5 widgets on my blog and each of them have their own advertisements. That is a quick way for me click the delete button associated to that bit of functionality.)
Is it created to be sold? Maybe the idea isn't to make money from advertising or downloads, but to be sold to a mega-site. (ie. Yahoo thinks your widget is the bomb. They are willing to part with an insignificant amount of money (to them) and in return you get a healthy purchase price for a rapid to release product.)
I'm not trying to judge. In fact, I'm trying to learn. I'm hoping someone will enlighten me on how "stable" companies can be formed and make ends meet when their product is a widget?
1 comment:
I've written a couple of posts on widgets including http://www.feld.com/blog/archives/2007/03/another_view_on.html and http://www.feld.com/blog/archives/2007/03/yawp_yet_anothe.html
I've had plenty of other thoughts and experiences with them and it's probably time for another post.
In the case of J-Squared, their main app is Sticky Notes. This isn't really "a widget" - rather it's a Facebook app. They are generating very large numbers of pageviews as a result of their user base (> 1.5m and counting) and subsequently have a very attractive advertising revenue stream going (and it doesn't take a lot to support two guys.) Getting the advertising "right" isn't trivial, but the J-Squared guys are having great success with it so far.
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