Comments on: For Widgets, VC Money Easy, Revenues Not So Much

By: Hey Hey Platform A, How Much Money Did You Lose Today? - GigaOM

Hey Hey Platform A, How Much Money Did You Lose Today? - GigaOM — Mon, 30 Jun 2008 19:46:08 +0000

[...] The real goal is to encourage apps developers to use the Platform A ad network to sell their ad space, in turn boosting the entire category of online social network advertising. Obviously the bigger that category grows the better it is for the struggling Platform A (and Facebook’s attempt to defend a $15 billion valuation.) Undoubtedly Platform A will net more developers, especially for ad space that provides a CPM of less than 40 cents, but I’m not sure if this will help grow the industry as a whole over the long term. [...]

By: Bill Templeton

Bill Templeton — Sat, 31 May 2008 23:14:14 +0000

Om, I largely agree with you but am suggesting that because the definition of “widget” is so broad, that we need to address each “sub-definition” of “widget” separately. So for each sub-definition, we should ask 1) do widgets provide utility to users, and 2) are they monetizable.

For “widgets defined as Facebook apps” the answer would be a qualified yes and yes, but I would argue that this is not a legitimate definition of a widget.

For “widgets defined as banner ads with a share button” the answer would probably be “no and no”. It seems that Clearspring and other widget “platforms” are trying to convince advertisers that if they attach a share button to their ads, then their ads will be virally spread by users. This seems to be for the most part a false assumption. So I agree with you that Clearspring’s continued funding is puzzling, to say the least.

For “widgets defined as user-generated profile bling” I think the answer is “yes” and “no”. Slide and RockYou users have published millions of widgets, yet these companies have not figured out how to monetize them, and hence their focus on Facebook apps and their blurring of the definition of widget to include the latter.

So in summary, I would agree with you that at this point, due to the lack of monetization capabilities, widgets are best viewed as a “feature” versus a “product” that a company can be built upon. But on the other hand, it is also clear that social media users like and continue to use widgets, so I think it is going to far to say that the industry does not need any more of them.

By: Om Malik

Om Malik — Sat, 31 May 2008 22:14:49 +0000

@Bill Templeton,

Is anyone of these broadly-defined-as-widgets making any money? The answer is no, that is unless you have a mega footprint and have an ad network to match that. You are reading one single post of mine and making a comment, though over a period of time I have consistently made the argument that this industry doesn’t need more widgets - what it needs is smarter monetization strategies/technologies and unfortunately no one seems to be targeting that, instead coming up with same old same old.

By: Bill Templeton

Bill Templeton — Sat, 31 May 2008 19:26:18 +0000

I think one of the difficulties of understanding the “widget” market is that the definition of “widget” is broad and ill-defined. Some consider Facebook applications to be widgets, some consider banner ads with a “share” feature to be widgets, some consider only Slide- and RockYou-style user-generated profile bling to be widgets. Each of these is a different product serving a distinct market and so lumping them all together and saying “I can’t see any business model in this mess” is not particularly illuminating.

By: carnet

carnet — Sat, 31 May 2008 16:47:36 +0000

Om,

“Yet you have companies like Sprout getting funded, which tells me that there is a mismatch between market reality and VC expectations and lack of understanding of this sector.”

Can you elaborate on this point?

You also mentioned “The other opportunity is in developing new kind of ad formats that can be scaled.”

We believe that all these widget and ad distribution networks have a massive bottleneck with content in the format they need today (Flash ads and widgets). Sprout is focused only on the content creation and we want to evolve the marketing into using new ad formats (more on that later this year).

By: Marc’s Voice » Blog Archive » Another day, even more blogging

Marc’s Voice » Blog Archive » Another day, even more blogging — Wed, 21 May 2008 20:10:11 +0000

[...] just love the notion of Clearspring going ‘more’ social. Om is right, Clearspring is infrastructure provider + consultant + ad network. Now they need to show “where’s the [...]

By: Ben

Ben — Wed, 21 May 2008 19:44:58 +0000

Om, Thanks a ton! I’ve been looking to build a widget for a couple weeks now. Your referral to Clearspring opened up a ton of options to me!

By: Om Malik

Om Malik — Wed, 21 May 2008 17:25:32 +0000

@ Scott,

And I am being generous with those numbers. you are spot on - prices are declining.

By: Om Malik

Om Malik — Wed, 21 May 2008 17:24:56 +0000

@ Ted … damn it dude, i wish i thought of it first and i could have raised millions :-)

By: Future of Online Advertising - Clearspring Raises Big Round - Social Media and Social Advertising « Furrier.org - Business & Technology Blog

Wed, 21 May 2008 17:08:55 +0000

[...] Future of Online Advertising - Clearspring Raises Big Round - Social Media and Social Advertising May 21, 2008 Posted by John Furrier in Technology. Tags: clearspring, online advertising, social advertising, twitter trackback Clearspring just secure what is being talked about is a big round. Ok I have an opinion on this. At PodTech we were one of the early players in having a deployable widget (player) with content emebbed. I can tell you that there is a big revenue model coming. Some just don’t see it yet. [...]

By: Clearspring Raises $18m | Mobilitee

Clearspring Raises $18m | Mobilitee — Wed, 21 May 2008 13:24:31 +0000

[...] Mashable Venture Beat CNet and to round it out, a skeptical view by Om at Gigaom [...]

By: Scott Rafer

Scott Rafer — Wed, 21 May 2008 11:36:57 +0000

@Tech PR — There’s a reason why Lookery got a couple billion pages a month of demand for our $0.125 CPM Facebook app guarantee. The number of “good blogs and sites” that average those high rates is less than a thousand globally. Widgets will average much, much less. More soon.

By: technology pr

technology pr — Wed, 21 May 2008 11:11:24 +0000

“low CPMs - somewhere in the $0.15-to-$0.20 range” that is ridiculously low. why is it so less when many good blogs and sites can demand an average of $10 per CPM.

By: Ted Rheingold

Ted Rheingold — Wed, 21 May 2008 07:30:15 +0000

I recently read about a widget maker that will embed a 1×1 pixel camera widget next to each full size widget, and the camera widget will track user eyeball movement to confirm the widget was actually looked at vs. just served up.

Yes, I’m kidding ;>