Hey, it’s time we caught up!
ISITE Design is sponsoring a free webinar in which I get to share the five things you need to do now to drive your digital business’ success. This has been an amazing year of working with great marketers around the world. I’m thrilled to have a chance to share some of these methods and views — and I want you to be in the house and part of the discussion.

We’re dialing in this Thursday, 2pm Eastern / 11am Pacific, and hope you can join us. (Jump to the registration details.)

What you can expect from #Digital2012
If you care about how the mobile web, video, and social media are coming together, then I think you’ll get fired-up by this. But knowing is different from doing, so we’ll also look at tools and techniques to help get your whole firm behind your digital business vision.

There’s just no way to write a post about all this stuff; it takes a webinar. But in just 60 minutes, it will be fast-moving and cover a ton. Please come join us, and bring friends. ;>

There’s an awesome give-away
Not that incentives are needed, but the first three audience members to log in on presentation day will get a copy of one of  2011′s best reads, Business Model Generation from Wiley Press. I’ll be demonstrating their business modeling rubric, and if you’re early, you’ll get a copy and be designing business revolutions from home.

You’re the first to know, so tell someone.
Since you read UsefulArts, you are the first to know about this free event. Act on this tip now, register here – *and* tip off your friends.

I’ll be tweeting about this using the #Digital2012 tag. Later today, I’ll start putting word about this on LinkedIn, and the usual channels. 

I’d be immensely in your debt if you’d spread the word — and I’ll try to pay you back Thursday with the smartest, most actionable, quotable presentation and discussion I can give. ISITE’s Chief Strategy Officer, Jeff Cram, will moderate questions and help get your voice in the mix.

This webinar is graciously organized by ISITE Design, with whom I have  ongoing business dealings. They do a lot of good promoting the discussion of online experiences that delight, reward, and elevate. I hope this will be one of those…with you in the house, it’s sure to be.

Thanks for encouraging my behavior!
Talk with you Thursday,
Dave

My article was kindly published on eConsultancy’s blog. Think this buy is cunning or crazy? Join the discussion there.

You and I may use Skype for free, but this week Microsoft agreed to pay quite a bill for the global phone service.

The $8.5 billion purchase is the largest corporate acquisition in Microsoft’s 38-year history. Microsoft CEO Steve Ballmer says the purchase will make his firm “be more ambitious, do more things.” One thing is certain: it absolutely defines the firm’s current world view. There were no signs of other serious bidders forcing Skype’s valuation up. The valuation, nearly triple the $3 billion paid for the profitless service it was just 18 months ago, is eye-watering. It reflects how important Skype is to Microsoft, and here’s why.

Last night I was fortunate to be at an event with Microsoft Online Services Division President Qi Lu. He presented the equivalent of Microsoft’s Web 3.0 vision, and I was able to question him about the changing role of content and data in the digital marketing ecosystem. Here are some thoughts on how his view of the future seems to fit with this purchase.

Search and Social Have a Big Story Ahead
While a search on Web 1.0, “the topical web,” can provide information based on popularity and authority, the “social web” 2.0 provides information based on trusted relationships. Microsoft sees that Facebook has a leading consolidated position on the web;  its data defines the terrain of these trusted relationships. Everyone you’ve messaged on Facebook, chatted with, liked or friended creates a relationship trail. The same is true of Skype. Its shows the small group of people with whom you really interact, and how actively.

How Skype helps: Microsoft values highly its partnership with Facebook. This purchase positions them to provide an IP voice layer to the service, and to use all of Facebook’s data to provide targeted advertising to users across Facebook and beyond. While Google is desperate to “crack” social, Microsoft is laser focused in partnering with its leader, Facebook.

Advertising Is an Inherent Part of the Online Experience
The partnership with Facebook will help Microsoft build advertising-supported search, which leverages the trusted recommendations of your network. It will evolve to become more location aware, and use geo-data, demographics, and search requests to return more relevant results to users. Imagine you’re searching for a movie to see, and your results leverage your friends’ input, location, and what people in that neighborhood prefer. As “information” becomes a commodity, search impressions will drop. Count on Skype to have built-in video advertising, which will buoy Bing/Microsoft’s rate of ad impressions.

Security Firms Want Your Voice
This is my own insight from knowing about embedded systems: Identity management, especially on devices which may or may not have keyboards, is a pain. What if you had the choice just to “say hello” and use any device or data you were authorized to use?  Part of the data that IP phone services get is the pattern of your voice. Microsoft is in the identity and access control business. Having voice prints for Skype’s 145 million active users would be a great start for this.

Hand-Held Games and Mobile Phones
xBox is increasingly a media convergence device. Microsoft will make voice part of that experience. Connecting players in game by voice is obvious. Imagine the possibilities for interactive game and entertainment programming. This expands the canvas for games and television.  Imagine Second Life with way better infrastructure, and run for mid-market adopters.

Microsoft has also lost a lot of momentum in the mobile space. Their tablets, music players, and handsets are getting eclipsed.  Turning gaming devices into smart phones is one path. Or, more obviously, they could use mesh networking between devices and wifi t0 provide smart phones that don’t have a reccurring carrier bill.

Is Skype Really Worth $8.5 Billion?
Perhaps not to you or me.  And not to Google, which this week had very big news on its $20/month Chrome computer, and a new Android version called Ice Cream Sandwich, which will merge its phone and device OS.  Google and Facebook have time to grow voice services, or to partner, and they risk having others lead. Skype is an accelerant for many of Microsoft’s most important ambitions. It’s the part of the future that Microsoft wants to deliver.

In Ballmer’s words, Microsoft needs to “be more ambitious, do more things.” It needs to get beyond making operating systems for PCs, which mobile and tablet computing is eroding. If that’s what this purchase delivers, then revenue or not, it may be the essential purchase reflected in Skype’s price to Microsoft.

Google +1  is the critical priority of the year for our friends at Google. Accordingly, they’ve invested their most prized asset in this effort: space on every single paid and organic search result.

(To get a quick explanation of +1, see the video below.)

Why So Much Urgency?
I see two large drivers for the urgency behind this launch, which makes this akin to Apple launching a new iPad.

Google is Desperate to Be a Social Platform
Google has tried a series of social initiatives: starring results, blocking results, side-wiki and Google Buzz, but none have achieved mass success. Twitter, Facebook, FourSquare and others have cracked the code on the social Web 2.0 networked world. Google is still the hub of Web 1.0 webpages. But the social graph lives on platforms that others control, and that’s a threat to Google.

Google Seeks to Restore Integrity to its Search Results via Social Markers
As I noted a few weeks ago, crappy organic search results are a threat to the value position of Google’s paid results. That’s the lion’s share of their revenue.

Google has been off inventing cars that drive themselves and devices that could replace television networks, but along the way they let SEO gamers lower the integrity of their organic search results. Adding social signals to the search formula is a step away from factors that SEO gamers control, such as link farms and exact match domains.

This Beta Is Still Half-baked, But It Deserves Your Attention Now
The rush to release the beta is evident, as all the elements in +1 which take place off the search engine results pages (SERPs) aren’t yet ready.  That’s too bad, because without them, +1 fails; that’s why its a beta.  After all, the purpose of a search page is to get people to content, not to survey them to see if they like what’s described in the search result.

The place where +1 will fly or fail is on the websites of potentially millions of users who will install the +1 button. Yet, just like the iPad2, if you’d like to add a +1 button to your website, “there’s a line for that.”

The other missing element is the special tab in your Google profile that shows people what you’ve +1’ed.  This may be soon to come, but until it does, this beta isn’t very social. Once people can Tweet and link to their list of +1s, and promote the program on their own sites, it will be legitimately social. For the time being, this is just a design shift on SERP pages, and a glimpse of what’s ahead.

In the Long Term, Google +1 Is Promising to Marketers
This promises social proof to validate firms’ search results. Further, there’s the potential of future influence on natural search engine rankings or the quality score of ads (SEO agencies, start your engines).  And if profile pages become social hubs, marketers can gain additional awareness and traffic through social sharing on these.

+1 Is Also Promising to Google’s Future
1. It gives searchers a reason to use Google when they’re signed in, rather than anonymously. This means Google can build richer records of individuals’ use of search and better target ads.
2. It expands the public use for the Google profile page, which can be built into a future social networking play.
3. It is an answer to Facebook’s Like button, which is already on about 2 million websites.
4. It is an innovation that moves the public spotlight off Google’s struggle with link farms and SEO gamesmanship.

Unanswered Questions and Unintended Consequences

Will This Initially Decrease Conversion Rates?
If you follow the UsefulArts Twitter feed,  SEO pro Andy Komack @akomack raised the question of the unintended conversion distraction that Google+1 introduces.  Currently the +1 box is a distraction from the core purpose of search pages: channeling traffic to content.  If a social opportunity interrupts the search experience, click-throughs could in fact decline. This might change over time, but I agree with his concern.

How Will Participation Change Search Engine Results?
Will sites with the +1 box on their pages gain an advantage in SERP rankings? Will sites with more +1s move up in rankings, or end up paying less for PPC placement?

Bold Prediction: This is the start of Google the Social Network
I see this as a move in a more expansive social play, in which Google will combine its Profile Pages, the +1 Button, Google Buzz, Google Chat, Google Phone, Gmail and its RSS Reader into an integrated social network. I suspect we will see these point services substantially repackaged into an aggregated offering. What do you think?

That’s my take on this now day-old initiative.
I’d love to hear your view, so please comment away here or email me your take.

Post update: April 1, 2011, 9pm: after an instance of the +1 button was found “in the wild” running on a non-google website, Google announced it would withdraw the public test of the button. All information in this post continues to be accurate – and this illustrates again Google’s urgency to accelerate this launch while attempting to manage marketers interest in this initiative. (details)

Extending the digital marketing investment and IPO streak we called back in December, today the Wall Street Journal reports that IBM will acquire Unica for $480M.

See details: Wall St. Journal

Related Posts on Digital Investment:

• 2010 Prediction: Digital Marketing IPOs Skyrocket <Dec 27>
• Read the Steamy FriendFinder Prospectus: A Dating and Porn IPO <Jan 19>
• Oracle Purchases Market2Lead IP <May 28>
• Hearst Media Buys iCrossing <June 10>
• Jive Takes 30 Million in Funding – Positions for Future IPO <July 26>
• Skype and Demand Media IPOs <Aug 9>
• Webtrends Buys Transpond <Aug 10>

Look around: These *are* amazing times. Who would imagine, in the “Summer of the Great Recession,“ that a digital content start-up and a phone company whose majority of customers pay nothing would be hot IPO news.  But that’s the point. These two companies shift the status away from the status quo.  And they’re heating up August, which is usually a quiet investment month.

Today Skype announced it would seek up to $100 million in its Initial Public Offiering (IPO).  This comes on the heels of last week’s S1 filing that content producer Demand Media seeks to raise $125 million. (You may recall that I predicted a digital IPO hot streak as a 2010 trend. So far, digital has been a hot spot in a largely cool market.)

If the name Demand Media doesn’t ring a bell, you may recall the lengthy feature in Wired that described them as a video content factory.  While I love video and at-scale content production, Peter Guber, Chair of Mandalay Entertainment and a board member of Demand Media, surely did not. During his INTA Keynote he explained how he helped counter this pejorative view through media outreach.

Demand Media’s genius is that it figured out that the things people are searching on aren’t necessarily what writers naturally focus on for fun.  That’s a breakthrough.  Imagine people searching for ways to get wasps out of their sheds, or how to draw a viking helmet.  But there aren’t many resources for such specific questions.

The company finds gaps between search demand and content, prioritizes the topics by shelf-life and the likelihood of finding ad sponsors, and then coordinates a network of freelancers who make more than 4,000 new videos and articles every day. As Wired said, they are like the kid in class who raises his hand and yells an answer on every question. Best answer or worst, simply being in channel more displaces competitors and gets them revenue.

Company CEO Richard Rosenblatt expects to be publishing 1 million items per month. That’s the equivalent to publishing one new English language Wikipedia every three months.  Unlike Skype, which is currently posting net income, Demand Media is still growing and moving toward profitable operation.  Its S1 notes that about a quarter of its revenue is from the Google advertising that appears on its pages. This makes the company somewhat vulnerable to changes in Google algorithms that send it both traffic and advertising.

Of course, there are other big-name digital properties (like Facebook0 that may be emboldened by these IPOs. The year is just more than half done, and investment is back and hot in the digital space.

Related Posts on Digital Investment:

• 2010 Prediction: Digital Marketing IPOs Skyrocket <Dec 27>
• Read the Steamy FriendFinder Prospectus: A Dating and Porn IPO <Jan 19>
• Oracle Purchases Market2Lead IP <May 28>
• Hearst Media Buys iCrossing <June 10>
• Jive Takes 30 Million in Funding – Positions for Future IPO <July 26>

It’s been six months since my post that 2010 investment in digital marketing would occupy an increasing share of marketing dollars.  Since then, Oracle, CDC, and Hearst Media have taken the leap.

And now, social business software company Jive has taken a $30M series C investment round from  Kleiner Perkins Caufield and Byers (KPCB).  Here’s the press release announcing the investment.

This milestone will allow Jive to move into a new category. Imagine Jive going up against other new social entrants (ie. Salesforce) or providing social tools as an enterprise social platform.

As they ramp this new capability for revenue growth, expect investment in the brand and talk of a 2011 IPO to fuel them way up the hype-cycle.

Read more:

• Michael Fauscette’s Interview on Jive’s Series C Funding
• Jeremiah Owyang & Altimeter’s SWOT analysis of Jive

Back in December I advised to be on the watch for digital marketing IPOs and acquisitions.  It’s been two years since Eloqua took funding, ExactTarget seems always to be 90 minutes from an IPO, and Neolane and Marketo just keep on boarding venture capital.

This week, Market2Lead, a niche player in marketing automation, was rolled-up by Oracle.  Market2Lead established itself as a way small business can identify and track anonymous traffic on their websites.

Unlike friends who think this is a good idea, I predict there is less than meets the eye to this acquisition.

• There’s less in it for Oracle: just look at their absurdly terse announcement.
• There’s less in it for Oracle’s platform: Oracle bought the IP but not the book of business, because they have different models and very different audiences. So is the IP is all that relevant?
• There’s surely less in it for Market2Lead’s customers: they have a business relationship with a company that no longer owns its own IP.  The firm’s owners just sold out, so Market2Lead’s customers, real early adopters who also bet on the company, are having a “Market2Nowhere” experience.

There are amazing digital marketing juggernauts to be formed by pairing breakthrough companies in this space. And, as predicted, I expect there are larger high-profile acquisitions and IPOs, assuming continued economic recovery.  I get why Oracle went for this, but now the real work begins.

Google made something huge out of Urchin.  So let’s see what Oracle makes from the IP assets of a shallow-end lead-gen company.  Oracle’s entry validates the space, but will they make the investment and do the learning necessary to move this already fast-growing market?  Watch for actions and a road map  that go beyond acquisition.

Today, Prime Minister Gordon Brown will announce a massive IT project to move in-person transactions with citizens online.  (See coverage in the Telegraph.) This will change a wide range of interactions, including tax disputes and payments, vehicle licensing, applying for school, public housing issues, and passport applications.

No less than  Sir Tim Berners-Lee, the World Wide Web’s inventor, has been a driver for the undertaking.

”I don’t want to go to a government office to do a government thing. It should all be online. That saves time for people and it saves money for the Government – the processing of a piece of paper and mailing it back costs many times more than it costs to process something electronically.”

Run away. Quickly
As a veteran e-government strategist, I’ve walked parts of this path, and this project is almost certain to underperform the idealistic goals being set out for it.

1. In the first year, every Briton will be issued a unique identifier allowing them to interact with all state agencies.  I happened to run the “unique identifier” project which issued six million identifiers to each student in a large eastern state.  I have no doubt that the UK already has other unique identifiers to base this on, but the human training needed to implement this across millions of citizens is daunting, as is the potential for fraud.
2. Within three years, the Times reported, the secure site would include a Facebook-style interactive service allowing people to ask medical advice of their doctor or consult their childrens’ teachers. Again, I managed an educational portal project that extended such functionalities, and I was part of a state portal project that brought 70 agencies under one system. Both took more than three years, and faced significant difficulties (most of which were cultural and political, not technical).
3. In ten years the nation would see closure of the physical centers dealing with most citizen affairs, as services would be offered through a single digital ”gateway.”  Any return that is ten years removed is beyond the political life of those involved with project. But so boldly planning to close large categories of offices immediately solidifies a resistance group.

Machiavelli on project management
The current state is easy to defend, as its benefits and constituents are present and well-rooted. Future benefits often lack real constituents who are aware and ready to engage in combat in the present for a future that is currently conjecture and hope.

Considering the negative politics, resistant culture, and rather ambitious goals inspired by a brilliant engineer and academic, the project is replete with “expectation risk.”

And so begins what I fear may be the UK’s digital Big Dig.

A call for insights & authors.
We’re calling on you, our blog’s readers to help select the top online law issues you face today, and to describe what you see ahead.  Dave Wieneke fills in the details in video above.

We’d like to hear from you by email at “strategy2.0″ at “gmail.com“. Starting next week we’ll start sharing what you and your colleagues have told us, along with original research and perspectives on our readers’ top themes.  Hey, thanks for reading UsefulArts, and sharing your ideas!

Mark the date. This announcement is the start of an effort by the FCC to regulate both Internet operations and content just as the Commission does in broadcast channels.  After an earlier effort to regulate bloggers as lobbyists failed, this appears to set the stage for another attempt for regulation of Internet content.

In a speech to the Federal Communications Bar Association on February 22, acting chairman Michael Copps said it was time to think “more rigorously” about the impact of the migration of communications to the Internet.

“Open access issues are important, but so too is how to ensure that as the Internet becomes our primary vehicle for communicating with one another, it protects the public interest and informs the civic dialogue that America depends on.”

The term “public interest” is what the FCC was created to protect in broadcast communications. Commissioner Copps’ use of this term signals an intent to attach the FCC to regulation of the Internet. And when the FCC regulates, it will not limit itself to operational issues, as “content” is where public interest in fact originates. The incoming FCC chairman seeks to remake the organization, so this statement connecting “the public interest” with Internet communication signals a potential sea change.

Of course, the Internet exists on private infrastructure. Your blog or website is a private asset.  I can think of no actual nexus for government control, other than that this medium is influential. And that makes it attractive for government agencies to try to control.

The Technology Liberation Front explored claims of “public interest” in governing communications last year:

The problem with all this “public interest” thinking, as Ben Compaine aptly notes, is that “In democracies, there is no universal ‘public interest.’ Rather there are numerous and changing ‘interested publics.’” The viewing public is likely to have a broad array of interests and desires that cannot be adequately gauged by what five FCC commissioners believe to be in the public interest.

Conservative reactionaries have predicted that under Democrats the FCC would resurrect the Fairness Doctrine to regulate talk radio and blogging. This connection of “public interest” to the Inertet certainly fits the scenario. We may find that the line between “reactionary” and “visionary” may only be that reactionaries are a little ahead of the visionaries.