First, the doom and gloom. The Web has become flooded with ?e-too?businesses, hundreds of ?he next Facebook?and plenty of wobbly business ideas based on making money from large audiences with advertising. Now that funding is harder to find, investors want to see bootstrapped businesses focused on income.
The good news is the consensus, particularly among those who survived the 2001 dotcom crash, that a downturn can be an opportunity for the most agile, intelligent start-ups to prove themselves.
?here were lots of awful parties in 2000 that were really for the business development guys,?says Nigel Eccles, co-founder of the news start-up Hubdub. ?ut it? the technology that? cool, not the exits. There? always lots of innovation in downturns ?this is the time for geeks and for ideas.?
Added to that, smaller start-ups can hunker down until the economy picks up.
Bigger media have far bigger problems ?huge overheads and a dependency on traditional revenue sources, such as TV or print advertising, that are sliding steadily downhill. Even online spending ?which saw voracious growth of 38 percent in 2007, according to the Interactive Advertising Bureau ?is predicted to remain flat next year. Tanking print sales haven? helped ?we?e already seen a slew of redundancies across publishing, and I? be surprised if innovation budgets hadn? been slashed before those jobs were cut. Surely if there were ever a time to prove a funding commitment to digital ?essential to the next generation of the media industry ?that time is now?
The Association of Online Publishers is putting on a brave face.
?e continue to be optimistic for next year,?says its co-chair Alison Reay, also digital media director at UK-based Telegraph Media Group. ?t is going to be difficult, but there will be more growth and it? an opportunity for all publishers to demonstrate their worth online.?br />
Companies must remain focused on how they get a return from investment in new technology, she says.
?he problem for major media companies is that they are still underweight on the Internet,?Eccles said. ?he opportunity I see is for media companies to work more closely with start-ups to bring engaging functionality to their community.?br />
There? huge potential to increase ?tickiness?of news sites by partnering with the great technology in relevant web start-ups, he added.
In terms of acquisitions this year, Yahoo remains a target, although as Microsoft insists it will not step back to the negotiating table, it remains unclear whether there is any company big enough to take it on in this market. Acquisitions of small teams by mid-size companies are more likely.
?here will be lots of consolidation, and lots of companies will fall by the wayside,?says Andy McLoughlin, co-founder of the start-up Huddle. The collaborative business tool benefited recently when a US competitor folded and recommended that their customers sign up with Huddle instead.
Mobile could perhaps finally claim to be gearing up for that elusive ?ear of mobile.?The sector was rudely awakened by not one but two intruders in the past 18 months: Apple, with the iPhone, and Google, with its open Android system.
?very year since 2000 is supposed to be the big year for mobile, but for the first time I? not skeptical about this year,?Eccles said.
The iPhone will continue to be massively influential, he believes, particularly its strategy of being a platform on which external companies and developers can build. With tighter budgets this year, we will see more focused apps building on the most successful trends so far ?the most popular gaming products and potentially lucrative location-based tools for mobile.
Google? video-sharing site YouTube has reached an important milestone in proving its legitimacy, with 90 percent of the 350 major publishers that have registered with the site choosing to place ads next to illegally uploaded clips of their videos rather than have them removed. It? a solution that satisfies all sides, and guarantees that YouTube will mature even further in the next year, adding full-length films. Post-Kangaroo, the future for web video looks less certain.
Despite the downturn, there? a tangible optimism in the start-up community. One of the most powerful technology trends of last year was the shift from sites as destinations to open, 貞haring platforms. Rivals including Google, Yahoo and MySpace all partner on the OpenSocial initiative, a shared set of standards for developing social networking applications across their sites. The benefits are more applications, as it is less work for developers to build for multiple sites, and crucially a more uniform experience for users.
Big media needs to start thinking like this. Can you imagine, for example, the UK? Times, Telegraph and Guardian partnering on the technology for a shared content system? It seems absurd, but the equivalent is happening in technology. The principle should be explored. Big media needs some big ideas. It? not about the money any more ?it? about being resourceful and flexible in order to survive.
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