The Next Net 25

•••:1:1:1 : THE NEXT NET 25 1:1:1:: ... UNDER THE HOOD the A new Web revolution is picking up steam, and the next Google or Microsoft could emerge from the companies that are in the vanguard. By Erick Schonfeld, Om and Michael V. Copeland Photo-illustrations by I I VI Malik, Randy Pollak I IIJOI lie;.:> I I LI Ie; '--'VI that are in the vanguard. By Erick Schonfeld, Om and Michael V. Copeland Photo-illustrations by Malik, Randy Pollak T hing s are really crack ling in Silicon Valley t hese days. Th ere's th e f renzied start up act ion, th e rising rivers of VC ing and insta nt- v ideo -messag ing app s th at w ill make tod ay 's e-mail and 1Mseem c rude. The Next Net is deeply collabora tive: Peo pl e f rom across th e pl anet ca n work t og et her on the same task, and p rodu ct s o r t ool s ca n be rap idl y t w eaked and improved by the co llective w isdo m of t he enti re o nline world. The new era is also c reat ing a rea lm of endless mi x and match : Anyone wit h a b row ser ca n access vast stores of information , mash it up , and serve it in new ways , to a few people or a few hundred mil lion. Most striking , t he Next Net c reates end less possibilit ies for entrepre neurs and estab lished players alike to take advantage of the Web 's new power. They are bu ild ing on t he success of early sta ndard- be arers-F lickr, My5p ace, Wi kip edi a- but also m ovi ng beyo nd th ose pion eers in creative and fa scin atin g ways . In th e pages th at fo llow, we id ent ify 25 co m pa nies, in fi ve Next Net categ or ies, w hose ap proac hes help illum inat e w here th e We b is head ed and w he re th e opportuniti es lie. Most are start ups, a lot of t hem w it h less t han 10 fu ll- t im e em p loyees . Few are cur rent ly makin g mon ey, and it 's a g ive n th at ma ny wi ll fa il. But it' s eq ually likely that so mew he re w it hin cash, eve n th e occas io nal bub ble-icious lo ng-t erm stock pre diction (Goog le $2,0 0 0, anyo ne?). There's so muc h hap pening that the buzzword rece nt ly em ployed to try to encapsu late the era-" Web 2.0 " -now seems ho pelessly inadequate , defined and redefined into near mean ing lessness by squadrons of aspiring entrepre neurs, ma rketers , and other fortune hunte rs. 50 it see ms a pa rti cu lar ly usefu l mome nt to wave away the smoke and home in on w hat's really core. Don 't be distracted by the Valley's hype -o- meter pushi ng tow ard t he red : There 's somet hing ve ry real-a nd ve ry power ful-afoot. Driven by ubiquito us broadba nd, c heap hard w are, and ope n-so urce so ft w are, t he Web is mut atin g int o a radically diffe rent beast than it has bee n. And th at is leadin g t o th e creat io n of entire ly new ki nds o f co m panies, new business m od els, and ocea ns of new op po rt unity . W e are in th e ear ly st ages of w hat mi ght be bette r th ou ght of as th e Next Net. The Next Net w ill encom pass all dig it al devices, f rom PC t o cell ph on e t o t elevi sion . It s def ining c harac - ...::1:1:1 THE IMA SHU PS'A N D'FI I!-T-ERS NEXT NET 25 1:1:1:: ... T he new culture on the Web is all about consume r creat io n; it 's composed of things like the nearly 30 millio n blo gs out the re and the 70 m illio n ph ot os available on Flickr. Wi th a click of the mo use, anyo ne ca n be a j ou rnalist , a pho tographer, or a DJ. The aud ience- t hat 1 billi on- pl us thr ong linked by th e Web- itse lf ;s creat ing a new t ype of soc ial medi a. That 's leadin g t o th e creat io n of hund red s of prom ising Next Net businesses, like Yo uTube, one of th e fast est-g row ing sites o n th e Web. It shows mi llion s of video clips dail y, from hom emade music v ide os to Saturday Night Live skits . A nyo ne can upl oad a clip to t he site, where it becom es publ ic and searchab le. An yone can t hen rate it, share it, and use it in a blog or we bsite. The Internet flatte ns th e cost of economic coord inatio n, and many more peop le can contrib ute to pro ducing th e same piece of content. On sites like Digg that agg regate news stor ies and blog posts from all over t he Web, it's t he aud ience itself t hat posts links to the stories and ranks th em. (The stories w it h t he most "Diggs" make it to the hom epag e.) Such voting will be t he orga nizing princip le of t he soon- to- launc h Newsv ine as wel l. But readers will also be ab le to submi t t heir ow n wr itten sto ries or become ed itors by creating t heir ow n Newsvi ne pages on a specific t o pic. The best part : Participat ing cont ributors and ed itors w ill get to keep 90 percent of th e ad revenues generated by the ir pages. Just as ope n-so urce progra mmers d id before them w ith code , peop le are putting p ict ures, v ideos, blog entr ies, or even simp le Web book ma rks online t o share wit h t heir fri end s. But o nce th is conte nt. On sites like Digg th at agg regate news sto ries and blog posts from all over th e Web, it's th e audience itself th at posts links to th e stories and ranks th em. (The stor ies w it h th e most "Diggs" make it to th e hom epag e.) Such vot ing w ill be th e orga nizing pr inciple of th e soo n-to- launch Newsvine as well. But reade rs w ill also be able to sub m it th eir own writt en sto ries or becom e ed ito rs by creati ng th eir own Newsvin e pages on a spec if ic t o pic. The best part : Parti cip at ing cont ributors and ed itors w ill get to keep 90 percent of t he ad revenues generated by t heir pages. Just as open -so urce prog rammers d id before them w it h code , peop le are putting p ictures, v ideos, blog entries , or even simple Web bookmarks on line to share wi th their friends . But once this content is posted, a surpr ising amoun t of it begins to attrac t a wider audience or form the basis fo r new services . Lastf m, for instance , mon ito rs all th e t unes you listen to on your computer and adds a social -netwo rki ng t wi st by sharing yo ur playlist w ith ot her Lastf m users w it h sim ilar tastes and v ice versa. A ll these sites are free, and few make money. Their focus is on creat ing communities and co llecting eyeballs; as wit h most Next Net ventures , the likely payoff would come through f lipping themselves to established companies . "Most will be bought by the big guys," says VC Philippe Cases.Then, he says, many of the brains behind the upstarts w ill take advantage of t he low cost of getting off the ground today to "come back w ith another start up ." other Lastfm users w ith similar tastes and vice versa. A ll these sites are free, and few make money. Their focus is on creating commun ities and co llecting eyeballs; as wit h most Next Net ventures , t he likely payoff wo uld come through flip ping them- Dlgg News aggregator SOCial adio r (San Francisco) Last-1m (London) The site'slinksare picked by the readership,which hasbeen doubling everythree months;newsitemswith the mostvotesmakethe homepage . Its software createsa personalizedstreaming radio stationbasedon the dig/tal musicyou already listento, sharesyour playliston the Web, and suggestsmusicfrom other closelyrelated playlists . Readersvote and comment on storiesbut can alsoorganizetheir own pages and write their own stories for which they collect 90 percent of , ..J!U!!I '-'" .. _ _ ".a . _ I.lI ; ..l!!ll. _~ Newsvlne (Seattle) Collaborative publisher _______ ~ .I ..... ....... SOCIAL..: MEDIA ...::1:1:1 1/0"----- --. THE NEXT NET 25 1:1:1:: ••• A s w e move t ow ard the Next Net , some of th e most usefu l sites w ill be th ose t hat eit her help "mash up "-m eaning mix and mat ch-conte nt from oth er parts of t he Web or act as a fi lter for th e overwhe lm ing mountain s of informat ion now at peo ple's finge rt ips. The launc h of Googl e Maps in ear ly 20 05 anno unced the era of t he Web mashup . An yon e can tak e a map from Goog le. ad d his own data , and disp lay a map mashup on his w eb site that plot s cr ime scenes, cars for sale, potential dates, or v irt ually any oth er subject. Trulia, for instance. is a real est ate mashup. Ty pe in t he neighborho od whe re you are looking to bu y a hou se, dia l in the size and features, and Trulia g rabs list ings from m ult iple onlin e sources and overlays the homes on Googl e Maps. Mashup com pa nies are really good at co bb ling t ogeth er w hat peopl e want from d isparate sources on th e Web . One of th e 8Alj ' ,ta> .web,;,ai'ili~ 'i'at.e5'gl '6'D5'l is .'if~s;h 'o from m ult iple onlin e sources and overlays the ho mes on Googl e Maps. Mashup com pa nies are really good at co bb ling t og eth er w hat peopl e want from d isparate sources on t he Web . One of t he new technolog ies t hat make th is possible is real simp le syndic at ion. or RSS, w hich has helped turn th e wo rld of blogs and t he med ia on its head . It is very mu ch like th e TiVo of th e Internet: Users can read w hat t hey wan t. w he n t hey wa nt, wi t ho ut surfi ng t ho usands of sites. That kind of intense, pe rso nal co nt rol over co nsum ing info rmat ion is a hallmar k of th e Next Net. Relate d to t he mashup is th e fi lter, w hic h ofte n co mes in th e form of a search eng ine. If yo u wa nt t o exp lore what 's bei ng said in t he bl ogosph ere, blog searc h engi ne Techn or ati is th e p lace t o g o. A no t her searc h eng ine, W ink. filt er s t ag s and saved bookm arks on ot her Next Net sites suc h as Del.ici o.us, Dig g, and part s of Yahoo . And Simp ly Hired sifts th rou gh rou ghl y 4 .5 mi llion jo b ope nings pos te d o n th e Web at job sites like HotJob s and Monster as we ll as o n corpo rate sites . W hat all these companies have in co mmo n is .:.~.~.~.~.~.!.!.~.~.!.!.!e :.:.:.:.:.:.:.:.:.:.:.:.:.:.:.::.:.:.:.:.:.:.:.:.:.:.:.:.:~ :.:.:.:.:.:.:.:.:.:.:~~.~.~ .:.:.:.:.:.:.:.:.:.:.:.:.:.:.:.::::::.:.:.:.:.:.:.:.:.:.:.: ...... .......•.•......•.....•.....•..................•. . • .... The site collects blogs and news from all over the Web and presents it in one consistent, updated, multifeed mashup. This do-It-yourself search eng ine, or swlcld, allows you to define sites you want to search, post the results on your blog or website , and get a cut of any search ads your audience clicks on. It searches nearly 4.5 million listings on other job and corporate sites; subscribers receive an RSS feed or e-mail alert when a job that meets their parameters pops up. The site filters the almost 30 million existing blogs, shows how many other blogs link to a particular post, and can rank blogs by topic. Combining home listings from agents' websites with Goog le Maps, the site is becoming a hit in California and is expanding into other regions. -.. ... . .. :.: .:. ::::: .....•.• :::::::::::::::::::::::::::.:.:.:.:::::::::::::::::::: ...•.....•... ....•.•..•....•.•.•.•••.••.•.•...•.•.. ::::::::::::::::::::::::::::::::~:~:::::::::::::::::::::::: ......•.........•..•.....•..........•.......•.....•...... ~I ..... .. ....... ~ Blogllne5 (Los Gatos, CAl Eureklter (san Francisco) Online feed reader Search mashup Simply Hired Job search (Mountain View, engine CAl Technoratl (San Francisco) Trulla (San Francisco) Blogsearch engine Real estate mashup Tag search Wink (Mountain View, engine CAl By searching user-generated tags on Next Net sites like Del.iclo.us and Digg, Wink filters the Web so users can sort links into different collections and a Googl e. Already the ulti mate Web filt er through gen- ...::1:1:1 THE SOCIAL MEDIA NEXT NET 2S 1::1 1 ::... F o r nearly a century , t he p hone , and voi ce as we know it, has existed largely in t he conf ines of a th in copper wir e. But now service providers can co nvert voi ce calls int o tiny Int ernet packets and let them loose on fast con nect ions, th us mimicking the traditional voice expe rience wit hout spending hundreds of mi llions o n infrastru ctu re. All you need are power ful-b ut cheap-co mp ute rs runnin g specia lized softwa re. The Next Net will be th e new pho ne, creat ing fertil e gro und for new businesses. Already, sta rt ups and incumb ent s alike are add ing vo ice to hith erto deaf-and- mute com puter app lications . America Online, A ppl e, Googl e, Microsoft , and Yahoo have all added vo ice t o th eir instant -messag ing clients . eBay bough t Web -phon e pio neer Skype for $2.6 billion last year; Skype, w hose technology allows calls that cost a tiny fract ion of w hat standard services cost. just adde d video calling to t he mix. But cheap calls are in many ways t he least interesting part of the new pho ne. Marrying voice and the Internet makes th e Web phone a powe rfu l new platform fo r software ap plicatio ns. The Gizmo Project of MP"3 .com creat or Michael Robert son's telepho ny startup , SIPphone, includ es all sorts of software add-ens , such as confe rence calling, mapping , callrecording capabilities , and goofy sound effects . More clients . eBay bo ught Web-phone pion eer Skype for $2.6 billion last year; Sky pe, wh ose technology allows calls t hat cost a tiny fraction of what standa rd services cost, just added video calling to th e mix. But cheap calls are in many ways th e least interesti ng part of th e new phon e. Marryin g vo ice and t he Internet makes t he Web phone a powerful new platform for softwa re app licat ions. The Gizm o Project ofMP"3.com creator Michael Rob ert so n's te lepho ny startup , SIPphone, incl udes all sorts of software add- ons, such as confere nce calling , mapping , callrecording capab ilities, and goofy sound effects. More import ant, the client is an open platform on which anyone can build apps . Sometimes the new phone is just part of anoth er Web applicat ion. For instance, startup Vivox is embedding its peer-to-peer voice techno logy into o nline videogames and dat ing services. In the dat ing applicat ion, those seeking soulmates can call each ot her anonymously from w it hin th e service and retain their privacy. A nd Canada's lot um can route calls,e-mail, and IMs to w hatever phone or comp uter yo u happ en to be using. Adding voice to the Web can also pote nt ially open up new revenue sources. Goog le, for one, is exper iment ing w it h a form of pay-per-ca ll advert ising in whic h simulta neous calls are placed to bot h your phone and, say, lotum (Ottawa, Ontario) With itsapp, userswill be Presence management able to controlwhere and when they receivevoice or software text data, routingcallsto their phones,e-mail, or RSS M~"'_ !!t. ....,., ....._,.., I i ra_ "'!!IIo r li ••• :1:1:1 NEXT NET 25 1 ... : THE :1:(:: SOCIAL MEDIA I t' s been a long tim e-all the way back t o th e dawn of de sktop Ajax tri cks built in. Glide a mouse over a message th at includes a dat e, and your calendar for th at day pops up. Move it ove r a website address , and an image of t he page appea rs. For an o nline spreads heet, tr y Tracker, t he latest release f rom Jot Spot (bette r know n for it s gro up-ed it ing "wik i" software) . Tracker beco mes an int eract ive we bsite open t o v iewing or changing by t he peop le yo u inv it e. Users also w ill soo n be able t o subscr ibe to a parti cu lar spreads heet row (say, "Sales in China") v ia an RSSfeed . A ll of t hese programs link to myriad ope n A Pls-adva nced progr am inte rfaces th at serve as building b loc ks fo r new app licat ions-a nd data on th e Web fr om Amazon, Goo g le, and ot hers. Thu s can the infor mat ion on yo ur desktop be fused w it h t he ent ire Web t hrough l-o,...h · n I" iri'/ilg ,iRle'!y idRR 5'8l-Wf'85' t!cIn.!i1119 comp ut ing in the early 1980s-since software coders have had as much fun as t hey're having right now . But today , browse r-based applicati ons are w here t he act ion is. A killer app no long er requir es hund red s of dro nes slav ing away o n mi llions of lines of code . Three or four eng ineers and a steady supply of Red Bull is all it ta kes to rapid ly turn a midnight brainst or m into a websit e so hot it melt s th e servers. What has change d is th e way today's We b-based ap ps can run almost as seamlessly as pro gram s used o n the desktop , w it h emb edded aud io, v ideo, and drag -and drop ease of use. Behind t his Web desktop fusion are technolog ies like Ajax (asynchronous JavaScript and XML), Macromed ia's Flash, and O'.J,tm' ;- ,'?,e}\s ,,;~('i\.\\J; .. V' , \!!i' / /jOO0l' ,'L'i' ded aud io, v ideo , and drag -and - b locks fo r new app licat ions-a nd data o n th e Web fr om Amazon, Goo g le, and othe rs. Thu s can the infor mat ion on yo ur desktop be fused w it h t he ent ire Web t hrough a powerful and increasingly invisible bridge between the two. Goog le, Microsoft, and Yahoo are energet ically try ing to crash thi s party. Mic rosoft rece nt ly launched W indows Live, a persona l on line co m ma nd cente r for e-mail, RSSfeeds, and ot her con tent, and is preparing t o fo llow up soo n w it h Off ice Live, a websi te- host ing and o nline projec t -manage men t serv ice t hat t aps into t he exist ing Off ice desktop progra ms. , ~~ drop ease of use. Behind t his Web desktop fusion are techn olog ies like Ajax (asynchronous JavaScript and XML), Macromed ia's Flash, and Ruby on Rails. We'll spare yo u th e t echni cal deta ils; suff ice it to say that t hese techn olog ies are g iving rise to a new we btop t hat may one day rep lace your suite of desktop app licatio ns. Start w it h Writ ely, a fr ee onli ne word processor t hat anyone who knows how t o use Microsoft Word w ill figur e out in a few clicks . Then ad d Zimbra, w hich is t aking a sw ipe at Microsoft Out look w it h an o nline e-ma il app licat ion t hat has all t he latest '"'' _"'f .t>;I~\\. ~ ~ JotSpot (Palo Alto) Wikis and online A pioneer of Web collaboration apps, a.k.a. wikis, it has unveiled its spreadsheets new Tracker app lication, which provides a powerf ul, highly collaborative online spreadsheet. Online calenc:lar This Web-based software allows families and groups to create private social networks. organize events, track schedules, and share photos; It may soon allow you to savephone numbers as hyperlinks and make calls by simply clicking on a link. Online project management Its Basecamp app. elegant and inexpensive, enables the creation, sharing, and tracking of to-do lists,files, performance milestones, and other key project metrics; related app Backpack, recently released, is a powerful online organizer for individuals. It enables online creation of documents, opens them to collaboratIon by anyone anywhere, and simplifies publishing the end result on a website as a blog entry. Taking aim at Microsoft Outlook, its Ajax-based application can, among other things, bring up your calendar for any date your ' I N CU M BEN T ·T O", AT C H W """"'" -.' ~ JOBox•• (San Francisco) 3751gna l. (Chicago) wrtteIy (Portolavalley, CA) Online word processIng Online e-mail Zimbra (san Mateo, CAl Microsoft . By rolling out Win dow s Live, Office Live, and othe r Next Net -centr ic soft ware, it hope s to g rab a dominant -if not monopolis t icshare of the webtop , which Bill Gates regard s as a crucial strategi c priorit y. ...::1:1:1 THE NEXT NET 25 1:1:1:: ... A related area of fre nzied act ion is among ~ the grow ing num ber of comp anies eit her offering themse lves as Web-ba sed platfo rms on which other softwar e and b usinesses can be built or deve lop ing ba sic t ool s tha t make some of t he def ining hallmark s of t he Next Net poss ible. For inst ance, Salesforce.com , a relative vete ran that p ion eered th e de livery of softwa re over th e Int ern et , recentl y launched a platf orm called AppE xchange; any prog ram mer can write an app lication t o run on A ppExchange, and Salesfor ce.com wi ll host and de liver it t o cust ome rs. Meanw hile, start up Bright cove is building a video publ ishing and distr ib ut io n pl atf o rm fo r Interne t TV. It w ill allow co m panies such as AOL and Viacom -as well as smaller publishers-to de liver video over th e Web, as eit her downloads or strea ms wi t h ad s attached . Then t here are the toolma kers. By deve loping blog -authorin g soft wa re called Moveab le Type and Type Pad, Six A part has been a catalyst for t he w ho le Next Net phenomenon . Its software has helped everyo ne fr om Pitt sburgh 's Super Bowl -w inning q uarte rback, Ben Roet hlisberge r, t o hum or ist Dave Barry publ ishing and di stribution p latform for Intern et TV. It will allow com panies such as AO L and Viaco m- as well as smaller pub lishers- to de liver vide o over the Web , as eit her dow nloads or st reams wit h ads atta ched . Then th ere are th e to olmaker s. By developing blog- aut horing soft ware called Moveable Type and Type Pad, Six Apart has bee n a catalyst for t he w hole Next Net phenome no n. It s software has helped every one fro m Pitt sburgh's Super Bowl -winning qu art erback, Ben Roethlisberger, to hum orist Dave Barry create b logs . Startup Sim p leFeed enab les companies such as EMC and Intu it to use RSS feeds as an opt-in m arket ing tool. The feeds can be customized to each recipient and tracked individua lly for both internal messaging and externa l ma rket ing campa igns. Brlghtc ove (Cambridge, MA) It's creating a video-distribution platform over the Web for producers large and small. JI.... (sanMateo, CA) BUsiness contact datab$se In exchange for their owncontact lists,salespeopleusethissiteto access virtualRolodex a Amazon. It's becoming a major Web platform by openi ng up its