del.icio.us Analysis
What is del.icio.us? ● social bookmarking web service ● a user can – store his links – share his links – discover new links
How does it work? ● Install del.icio.us buttons into your browser ● Whenever you find yourself on a site you want to bookmark --> click on „tag“ button ● describe site with tags relevant to it's content and click save
How is del.icio.us Web 2.0? ● public web service ● tags ● community, wisdom of the crowds ● share and find information
● users are main contributors ● software gets better the more people use it ● data as the „Intel Inside“
How did del.icio.us become so popular? ● tag bookmarks instead of storing into folders ● share bookmarks with friends ● find super relevant pages tagged by other users ● measures importance and relevance of site: how many other people have tagged this page?
How did del.icio.us achieve the critical mass of users? ● when building a social network, value for first users is very small ● achievement of critcal mass is crucial ● del.icio.us provided real benefits to it's first users even though network is empty (tagging and organizing your bookmarks) ● once certain amount of tagged websites, very valuable for users who want to find new content
Growing as a platform ● In a market where each customer gets his own version of a product – initial product will copied and improved by competitors – market share is distributed over several players
● Internet platform is different: – Software gets better the more people use it – The first player will have the most users --> most attractive platform for a new user most likely his friends already on that platform – if you want to challenge main competitor --> substantially better or completely new product
how does this apply to del.icio.us? ● del.icio.us often cited as „perfect example“ of Web 2.0 application ● first to be in social bookmarking ● a lot of early adopters tried the product ● very unlikely to change service
(How) Does del.icio.us make money? ● contextual advertising ● on the side of search results like Google ● highly profitable model
● but, different kind of users and queries on del.icio.us than on google ● danger: the more relevant your search results are, the less likely users are to click on ads ● many people use del.icio.us to increase relevance of search results
Why has Yahoo bought del.icio.us? ● Why did Yahoo buy del.icio.us when they have their own social bookmarking service called My Web 2.0 ? ● strong brand, independent from yahoo URL and branding ● very active user community ● experience of developers ● huge potential
But del.icio.us makes little money? ● direct traffic and ad revenue not the only factor ● huge amount of data about websites being collected by a huge community
4 ways to monetize social bookmarking ● contextual ads ● sell or use tag-Stream data – how do people perceive my and competitors websites? – trends
● advertorial tags – use tags that are related to buying products – business owners pay for good ranking with those tags ● contextual advertising based on user value – not only relevant to query but also relevant to user behavior (what kind of ads does he click on?)i
Competitors ● three types of competitors: ● other social bookmarking services ● directories ● search engines
social bookmarking services ● same market with new functionality and/or paying of users to attract new users ● different geographic market, e.g. Mister Wong for german speaking market ● StumbleUpon – let's user „stumble“ randomly on new pages according to their interests
simpy.com ● same core market as del.icio.us ● Create private or public groups, invite others, collaborate ● sync with del.icio.us ● earn money by having people click on ads on your link page ● use Simpy to find like-minded users ● compared to del.icio.us, unimportant
Directories ● since beginning of the internet, before search ● to little flexibility ● run by a certain organization who has to check every submitted site for correctness/relevancy ● users are not contributing
Going against Google ● Google has very complex algorithms to determine the relevance of a site for your search (Pagerank et al.) ● Sites in del.icio.us are simply tagged by users ● Google gives a lot more results than del.icio.us, but amount of results is often not important
● user wants the top three results, and they should better be super relevant with great content ● top results from del.icio.us are relevant because tagged with that keyword and important because many people have tagged it (wisdom of the crowds) ● del.icio.us has a big potential in the search field and might see an increase of search queries soon
del.icio.us potential ● SEO not possible with del.icio.us ● Pages shown are relevant not because of SEO but because of users liking the content ● if del.icio.us provides better results than google, expect a shift from google to del.icio.us
● for online businesses, about 80% of traffic comes from search engines ● when social bookmarking becomes more important for search --> del.icio.us becomes very important for everybody who makes money online
Conclusion ● del.icio.us could dramatically change the way we navigate the web ● is not going to replace search engines entirely, they still can do things del.icio.us can not ● has very active community that tags the whole web --> huge amount of valuable data
● wisdom of the crowds helps increase relevance of search results ● find better information faster with social search ● increase of importance of social search ● del.icio.us is number 1 for social search huge advantage in market
Thank you for your attention by Flavio Rump
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