Facebook CEO and founder Mark Zuckerberg has been named Time Magazine’s person of the year. He will, of course, grace the magazine’s cover for the special edition, as the individual who has done the most to influence the events within a year.

Zuckerberg isn’t a surprising pick, considering the huge year Facebook has seen in terms of massive user growth, controversy surrounding privacy issues, and the release of new products. And The Social Network’s success also contributed to the media frenzy surrounding the company and its founder.

Here’s what the publication had to say about why they chose Zuck: “For connecting more than half a billion people and mapping the social relations among them; for creating a new system of exchanging information; and for changing how we all live our lives, Mark Elliot Zuckerberg is TIME’s 2010 Person of the Year.

Zuck will join a host of Presidents who have received the honor including Presidents Barack Obama and Bill Clinton. Other tech luminaries to have graced Time Magazine’s cover include Amazon founder Jeff Bezos and Microsoft co-founder Bill Gates.

Mark Zuckerberg Named Time Magazine’s 2010 Person Of The Year

Editor’s note: Brand dollars are still the biggest unclaimed prize on the interent. Guest author Steven Carpenter handicaps the players who are most likely to get them.

One of the biggest business opportunities in the consumer Internet space is to create products and services that attract a share of the billions of dollars in held-up brand marketing that has yet to find its way onto the web. With the explosion of various kinds of content and the innovative ways advertisers can segment and track users, why are marketers so reluctant to open up the floodgates? Quite simply, because the current online solutions—search, lead generation, display, video—do not provide a high enough return for these kinds of categories and are not consistent with the image these brands have invested so heavily to achieve.

Commensurate with the potential riches, there is an enormous amount of startup energy and experimentation going on in this area. In this installment of the TechCrunch Teardown, I will look at the four leaders—Facebook, Twitter, Foursquare, and Groupon—and how their new interactions—“like”, “follow”, “friend/check-in”, “group coupon”—are fairing with brand advertisers.

The $20 Billion Opportunity

According to Ad Age, the Top 100 Global Advertisers spent over $100 billion in 2009 across the various print, television, radio, outdoor, and Internet channels; based on data from the previous year, 39 of the 100 had budgets of $1 billion or more (see table 1, click to enlarge). Procter & Gamble, manufacturer of 50 leading brands (such as Tide, Dawn, Pampers, Gillette, and Crest), of which 23 generate $1 billion or more in sales, is the world’s largest advertiser, spending close to $9 billion annually. It should follow, then, that the Internet economy as a whole is effected by how the brand managers at these companies decide to allocate their funds online.

As you can see from the last column in the table at right, the leading marketers are only spending $1.8 billion, or 2.6% of their total budgets, online, despite the fact that consumers are spending close to 30% of their time on the Internet. Of the top marketers, only General Motors, Disney, Bank of America, and News Corp. allocated more than $100 million to the web.

So who has found the best marketing value online? Companies that market and sell financial services, insurance, automotive, communications and media, and consumer technology. It makes sense: these are companies with products that can be found easily using search, and whose customers are most likely to be acquired online because they can transact online. To date, Google and vertical content sites such as Yahoo! Finance and Bankrate have been the largest benefactors of these re-allocated dollars.

New Kleiner Perkins partner, and former Morgan Stanley analyst, Mary Meeker, estimates that closing the gap between consumer attention and ad dollars spent on the Internet to be a $50 billion global opportunity. If the Top 100 marketers bring their marketing budgets in alignment with 30% of time spent, I estimate online brand marketing to be a $30 billion global opportunity and $20 billion in the U.S. As evidenced by Google’s recent pursuit of Groupon, its traditional CPC and display advertising may not be sufficient enough to meet these marketers’ needs.

The Four Horsemen

There are four Internet companies currently best positioned to work with brands to create innovative marketing solutions that will appeal to millions of consumers—Facebook, Twitter, Foursquare, and Groupon. I acknowledge it is not exactly a fair comparison for two main reasons: 1) Facebook has enjoyed a 3-4 year head start on the field and 2) each product has a different use case and thus attracts a different audience with distinct revenue opportunities. Each company, though, has found its way into the mainstream and now finds itself with an attractive platform for brand experimentation.

I see the four product experiences these companies offer on a continuum of online-to-offline interaction on one axis, and requiring passive-to-active behavior on the other. The Facebook experience, for example, is largely an online one where a user can say something about herself by associating with a particular brand by “liking” it. This is an incredibly passive expression that requires a split-second action with little to no long-term repercussions. She can choose to visit the brand page and see the news feed at her convenience.

Twitter, on the other hand, is a personal tool for gathering realtime information—no one knows which feeds the consumer decides to consume or to ignore. While Twitter is similar to Facebook in its largely online-focused consumption, it is a much more “active” medium. Users are constantly reminded when they are following a brands’ information stream. As soon as the information becomes unimportant, too frequent, or spammy, she will simply cut off the connection.

Groupon (which I wrote about in an earlier teardown) is the lightest application, ironically, even though it is the only one of the four that requires a user to make a purchasing decision. Transactions occur easily online and the offline experience of presenting a coupon is consistent with decades of proven user behavior.

As of now, Foursquare asks the most of its users in relation to branded campaigns, but it is also the closest of the four to placing customers in the physical proximity of brands and retailers.

How They Are Doing

You can see how the four different interactions 1) naturally lend themselves to different brands and 2) exhibit a large disparity in terms of the sheer number of participants. And this is not necessarily a bad thing: 44,000 passionate luxury fashionistas at NY Fashion Week may be more valuable to Yves Saint Laurent than 5 million fans on Facebook.

It should come as no surprise that the biggest brand in the entire social ecosystem is Coca-Cola with 20 million Facebook Fans. Whole Foods is the biggest brand on Twitter with 1.8 million followers and the Gap, having sold 440,000 half-off coupons using Groupon, is that startup’s largest brand experiment.

Of the top 50 pages on Facebook, 8 of them are leading advertisers and brands, compared to Twitter which doesn’t have a single brand in its top 50 users. Of Facebook’s top 50 brand pages, 31 of them are food and beverage companies, while 11 are consumer products such as Converse All-Stars and Victoria’s Secret. The most important takeaway is that brands have a far greater following on Facebook than they do on their own sites. Facebook’s best move has been to convince brands to market their Facebook pages rather than driving traffic to their own websites.

The most interesting finding is that what seems to be popular on Facebook is not so on Twitter. If you click on the table at right an dlook at the top 50 brands on Facebook, the “Follower/Fan Ratio” (the result of dividing the number of Twitter followers to Facebook fans) does not get higher than 8% (Disney). This indicates that Twitter might have a more difficult time than Facebook in attracting overall brand dollars with its current product feature set.

This is evident when you look in detail at one CPG company and its portfolio of brands. I did a comparison of the differing success of P&G’s top brands using the two platforms (click on table at right to enlarge). In every case except one (Dawn), the branded experience on Facebook is more popular in terms of numbers than on Twitter. In a few cases, there does not appear to be a reason for even having a Twitter presence. It is interesting to note that the most followed P&G Twitter account is the company’s own corporate PR team.

Facebook still has a lot of work to do and it is far from a foregone conclusion that it has won. While the lightness of its interaction makes getting to scale easier, maintaining enough valuable interactions on the branded pages and engaging long-term customer interest is a huge challenge. For example, according to eMarketer, nearly 1/3 of Facebook users who unsubscribed from a branded page simply were no longer interested in it. And, more to the point, simply because Coke has 20 million Fans does not necessarily mean Coke will pay for the privilege to advertise on Facebook if it cannot see a return.

So what brands seem to be working well on Twitter and far better than on Facebook? Daily deals, such as Dell Outlet, Amazon, and Woot, and companies that place customer service and community at the heart of the brand experience, like Zappos and Etsy, exhibit the most lopsided Follower/Friend ratio. It is important to note that two companies that had horrific customer service challenges over the past few years—JetBlue and Toyota—have fully embraced Twitter as a direct communications channel. The biggest driver of Twitter success as compared to Facebook is the timeliness of the information.

Twitter, then, is well positioned to capture marketing dollars from companies optimizing for deals, retailers that have frequent specials, ticketing and events, movie studios, television shows, last minute deals, airlines, and hotels.

It is still early days for both Foursquare and Groupon in terms of working with big brands. Foursquare has seen traction with high-end luxury and media brands, likely as a result of its headquarters being located in New York and early media partnerships. Of course, Foursquare’s long-term viability as a stand-alone “check-in” company is still an open question with Facebook Places breathing down its neck. This is a strategic move on Facebook’s part to get closer to offline actions, transactions, and local commerce.

While Groupon is the defining company of next-generation e-commerce, it has a tougher road in terms of working with brands and large retailers. These companies tend to be more sensitive to heavy discounting as they don’t want to train their customers to wait for 50%-off coupons. And, they don’t like to be so indiscriminate with their offers.

Overall Assessment

I evaluated the four companies along the six different types of offers and campaigns that I can see consumer brands wanting to engage in:

• Coupons: Simple discount off purchases
• Location: Physical check-in or product scan
• Loyalty: Frequency, “Mayorship
• Time-based
• Special Events: VIP’s
• Inventory Close-Outs

Based on my research, while Facebook, Twitter, Foursquare, and Groupon are the best positioned to capture the estimated $20 billion in pent-up consumer marketing dollars, none of the four are currently optimized to execute along all of the necessary dimensions. There are considerable opportunities for startups to innovate and capture share. I look for this to be one of the most attractive areas for entrepreneurs in the consumer internet for years to come.

Bugatti teardown photo credit: Flickr/David Villarreal Fernández

TC Teardown: Who Is Best Positioned To Win The $20 Billion Brand Advertising Prize?

WikiLeaks was briefly down this morning not only because of ongoing DDoS attacks, but because it was actually taken off Amazon Web Services by Amazon and moved back to a Swedish provider, according to this tweet from Reuters.

WikiLeaks has been in the news almost every day since it released 251,287 U.S. diplomatic cables to major media organizations on Sunday. Yesterday founder Julian Assange was put on Interpol’s Wanted list for non-WikiLeaks related charges.

Neither Amazon or WikiLeaks have commented on the matter.

Amazon Pulls Hosting Services For WikiLeaks

Open source software giant Red Hat has acquired cloud application deployment and management platform Makara.

Makara, which was rumored to be in talks with Red Hat a few months ago, allows organizations to provision, deploy, manage, monitor and scale their Java and PHP applications on both public and private clouds, such as Amazon EC2 and VMWare-based clouds. Makara offers both on-demand and on-premise deployments.

Red Hat, who is best known for enterprise operating system Red Hat Enterprise Linux, plans to integrate the JBoss Enterprise Middleware infrastructure with Makara’s Cloud Application Platform to offer organizations a comprehensive platform-as-a-service.

Red Hat bought open source company JBoss for $350 million in 2006 and has created a Platform As A Service based off of the technology to allow cloud service providers, ISVs and Software-as-a-Service (SaaS) to take existing assets and develop new applications and deploy them to a wide range of public and private clouds.

Red Hat Acquires Cloud Application Platform-As-A-Service Makara

Does the Internet tend towards natural monoplies? Columbia Law professor Tim Wu makes a strong argument that it does in an Op-Ed in this weekend’s Wall Street Journal. While there is plenty of diversity on the Internet and few barriers to setting up shop, he points out that category after category is dominated by a single firm: Google, Facebook, Amazon, Skype, Twitter, Apple, and eBay.

Wu writes:

The Internet has long been held up as a model for what the free market is supposed to look like—competition in its purest form. So why does it look increasingly like a Monopoly board? Most of the major sectors today are controlled by one dominant company or an oligopoly. Google “owns” search; Facebook, social networking; eBay rules auctions; Apple dominates online content delivery; Amazon, retail; and so on.

If you define a market narrowly enough, it is easy to make any company look like a monopoly. But let’s concede that the Internet creates a lot of winner-take-most, if not a winner-take-all, situations. (A company can effectively have monopoly power without technically owning 100 percent of the market). The bigger question is: How durable are information monopolies on the Internet?

The same factor that gives rise to these monopolies so fast can prove to be their undoing: the lack of friction. Switching costs are almost nonexistent for most products on the Internet. Every single competing product or service is literally just a click away.

If there is one thing that locks us in, it is ourselves. It is the network effects at play across the Internet which help build up these natural monopolies faster than they otherwise would. Wu makes a deliberate point of this:

It was we, collectively, who made Google and Facebook dominant. The biggest sites were faster, better and easier to use than their competitors, and the benefits only grew as more users signed on. But all of those individually rational decisions to sign on to the same sites yielded a result that no one desires in principle—a world with fewer options.

Every time we follow the leader for ostensibly good reasons, the consequence is a narrowing of our choices. This is an important principle of information economics: Market power is rarely seized so much as it is surrendered up, and that surrender is born less of a deliberate decision than of going with the flow.

The more people who use Google’s search, the better it becomes; the more people on Facebook, the more you need to be on it too; the more people who sell on eBay, the more buyers it attracts, and so on.

Certainly information monopolies do exist and can persist. Look at Microsoft’s everlasting hold on desktop operating systems. But the half-life of market domination seems to be dwindling. AT&T ruled for 70 years, Microsoft ruled for maybe 25, so far Google has ruled for 10. Will Facebook rule next, and of so, for how long?

Monopoly is a big, bad, evil word, but not all monopolies are bad. One of the main reasons monopolies were regulated in the first place was because of their pricing power, but today’s information monopolies provide many of their services for free. It’s hard to argue consumer harm when consumers either aren’t paying much or are paying very little. (Amazon, for instance, maintains its dominant position in ecommerce through low prices). Many information monopolies today are more interested in collecting our data than taking our money.

The stronger argument is that information monopolies discourage competition, and that ultimately will limit choice and innovation. Look at search. You’d have to be crazy (or Blekko) to launch a search startup today and try to go up against Google.

But that brings us back to the durability issue. If Google’s power is transitory because it missed the boat on social, then does it really matter whether it holds near-monopoly power in search? While it is a good idea to remain vigilant against the rise of any information monopolies, the Internet will keep moving faster than the law or regulations can keep up.

Photo credit: Flickr/ Chris Smart

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How Durable Are Information Monopolies On The Internet?

]]> http://www.invisionskins.net/how-durable-are-information-monopolies-on-the-internet/feed/ 0 http://www.invisionskins.net/cheep-combines-product-comparisons-with-social-shopping/ http://www.invisionskins.net/cheep-combines-product-comparisons-with-social-shopping/#comments Tue, 26 Oct 2010 15:00:38 +0000 admin http://invisionskins.net/cheep-combines-product-comparisons-with-social-shopping/

There are a vast amount of product comparison sites on the web and a number of social shopping sites that allow online shoppers use their social graph to share purchasing decisions. Today video search engine Blinkx is trying to combine the two functionalities with the launch of Cheep, a social shopping service.

Through a browser add-on (which currently only works on Firefox or IE), Cheep recognizes when you’re looking at a specific product and will show you current price comparisons from around the Web, as well as reviews and ratings. Cheep will appear as a small bar at the top of your screen when you’re looking at a product page. The startup has indexed millions of products nearly 200 online retailers, including Amazon, BestBuy and Walmart, so chances are that Cheep will be able to find the product you are viewing within your browser.

Beyond the add-on, Cheep is also a standalone social network that encourages users to share their shopping activity, including purchases, wishlists, likes, reviews and more; with other Cheep members. The startup is also creating profiles for millions of products, which users can share on Facebook and Twitter.

I doubt I’d really use the online community side of Cheep but the browser add-on could be useful. The ability to receive automatic, contextual information such as alternative reviews or prices for a product without having open another browser tab for a search is appealing.

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Cheep Combines Product Comparisons With Social Shopping

]]> http://www.invisionskins.net/cheep-combines-product-comparisons-with-social-shopping/feed/ 0 http://www.invisionskins.net/amazon-new-kindles-selling-at-record-rates-u-s-store-now-has-over-670000-books/ http://www.invisionskins.net/amazon-new-kindles-selling-at-record-rates-u-s-store-now-has-over-670000-books/#comments Wed, 25 Aug 2010 13:12:59 +0000 admin http://invisionskins.net/amazon-new-kindles-selling-at-record-rates-u-s-store-now-has-over-670000-books/

Amazon has announced today that more “next generation Kindles were ordered in the first four weeks of availability than in the same timeframe following any other Kindle launch, making the new Kindles the fastest-selling ever.” In addition, in the four weeks since the introduction of the new Kindle and Kindle 3G, customers ordered more Kindles on Amazon.com and Amazon.co.uk combined than any other product.

The new version of the Kindle started shipping to customers today, which Amazon says is two days earlier than previously announced. The fast growth of the new version of the Kindle isn’t surprising considering Amazon’s recent assertion that it sold three times as many Kindle books in the first half of 2010 as it did in the first half of 2009, with the Kindle continuing to be the number one product sold on Amazon. Amazon says the U.S. Kindle store now over 670,000 books. And the Kindle has reportedly been sold out until the fall.

Amazon announced the new, more affordable Kindle at the end of July. The updated version has a sleeker design with a 21 percent smaller body 15 percent lighter weight, 20 percent faster page turns, up to one month of battery life with wireless off, double the storage to 3,500 books, built-in Wi-Fi for the lower price of $139. The new Kindle 3G with all of these new features plus with free 3G wireless is $189.

Amazon also said today that the Kindle and Kindle 3G are the most gifted and most wished for products on Amazon.com and Amazon.co.uk combined. The company recently launched a UK Kindle store with more than 400,000 titles, looking to boost growth internationally. So far, customers in 125 countries on six continents have placed orders for the new e-book device.

Of course, while Amazon is touting the massive traction of the device, the company still faces competition from the iPad and even the NOOK. Of course, Amazon founder Jeff Bezos doesn’t seem too worried about the iPad. Bezos explained recently to Charlie Rose that with the Kindle, Amazon isn’t looking to “create an experience” — they want the author to create the experience. Bezos believes that this differentiates the Kindle from the iPad and and other devices. And there are those reports that the Kindle is outselling the iBooks store 60 to one.

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Amazon: New Kindles Selling At Record Rates, U.S. Store Now Has Over 670,000 Books

]]> http://www.invisionskins.net/amazon-new-kindles-selling-at-record-rates-u-s-store-now-has-over-670000-books/feed/ 0 http://www.invisionskins.net/power-assure-gets-11-25-million-jolt-of-funding/ http://www.invisionskins.net/power-assure-gets-11-25-million-jolt-of-funding/#comments Wed, 14 Jul 2010 22:25:05 +0000 admin http://invisionskins.net/power-assure-gets-11-25-million-jolt-of-funding/

Power Assure, a Santa Clara green IT company, today announced that it scored $11.25 million in series B funding. The round was led by energy efficiency-focused investors Good Energies, and joined by Point Judith Capital and Draper Fisher Jurvetson.

Power Assure’s chief technology officer Clemens Pfeiffer said the company will use this capital to take its technology to a broader market. Its software cuts data centers’ power consumption by half, on average, the company claims.

Palo Alto Research Center (formerly known as Xerox PARC) uses Power Assure, but Pfeiffer declined to name other major customers.

Founded in 2007, Power Assure took a $2.5 million series A round from DFJ in 2009. It also previously won non-dilutive grant funding including a $5 million grant from the Department of Energy, and a $50,000 cash prize at the 2008 California Clean Tech Open. (In total, the company has raised $18.75 million.)

Power Assure’s software works like “automatic lights out” in homes, Pfeiffer says. “If you have a lot of traffic on your site or a lot of users on your app, then you need to keep a lot of servers in your data center running. During low utilization times you don’t need them all running. You can use them for other purposes, or in an extreme case sleep or shut them down to save energy and money. That’s just as long as you can adjust the capacity dynamically.”

Companies that have expressed the most interest in using Power Assure’s solutions in 2010 have been government organizations “trying to follow the mandates of the Obama administration,” financial services companies “because of the pressure that they are under to cut costs,” and companies that operate “data centers in the ten- to two-hundred-thousand square feet range,” but may not have achieved the efficiencies of an Amazon or Google yet, according to Pfeiffer.

Jonathan Koomey, a consulting professor at Stanford University whose research focuses in part on the growth and environmental impact of data centers, said it’s a good time to be in the business of green IT services:

“Climate change is becoming a bigger more important part of companies’ risk profiles and planning. And the cost of IT has gone up a lot in the last five years. Computers have gotten cheaper, but things like cooling and power distribution have gotten more expensive to the point where the cost of buying the cooling and backup power is comparable to the cost of a data center’s IT equipment itself. Companies like [Power Assure] can save a lot of money for businesses that use data centers while reducing emissions. That’s a good thing, and a reminder that the net effect of using data centers in a rational, sustainable way — moving bits not atoms — is actually a positive for the environment.”

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Power Assure Gets $11.25 million Jolt of Funding

]]> http://www.invisionskins.net/power-assure-gets-11-25-million-jolt-of-funding/feed/ 0 http://www.invisionskins.net/amazon%e2%80%99s-mp3-store-on-hiring-spree-may-be-planning-major-relaunch/ http://www.invisionskins.net/amazon%e2%80%99s-mp3-store-on-hiring-spree-may-be-planning-major-relaunch/#comments Wed, 14 Jul 2010 00:30:26 +0000 admin http://invisionskins.net/amazon%e2%80%99s-mp3-store-on-hiring-spree-may-be-planning-major-relaunch/

When it comes to buying music online, there’s iTunes, which is ahead by a mile, and then there’s everyone else. According to a recent report published by Billboard, iTunes accounts for 26.7% of US music sales, making it the top ranked music vendor in the United States, including physical retailers like Walmart and Best Buy. Amazon accounts for a respectable 7.1% of the market, but its digital download service — which competes directly with iTunes — only represents a meager 1.3% share (the rest is from physical CD sales). But we’re hearing Amazon is looking to turn things around.

We’re hearing from one source that Amazon is aiming for a major Q1 relaunch of the MP3 Store’s APIs and web services. They’re asking partners that are building out or planning to launch Amazon MP3 integrations to hold off until this new release is baked, we’ve heard.

Another piece of evidence: Amazon is actively hiring for the MP3 Store team. The MP3 Store’s Twitter account has just tweeted a page with over a dozen job openings for both business and engineering positions, including spots for a Web Applications Manager, Client Application Developer, and engineers dedicated to mobile apps for both Android and other partners (some of these openings were listed in the last five months, while others are apparently brand new).

Amazon’s MP3 store has been available in a public beta since September 2007, and made waves in 2008 by becoming the first online music vendor to sell songs without DRM (iTunes eventually followed). It comes pre-installed on Android phones as a native application (which works quite well), but its desktop website has a pretty poor user experience compared to iTunes. Look for Amazon to try to get its store integrated in as many places as possible later this year and early next year — given its past association with Android, it’s even possible that Amazon may be involved with the Google iTunes Competitor that was previewed at Google I/O.

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Amazon’s MP3 Store On Hiring Spree, May Be Planning Major Relaunch

]]> http://www.invisionskins.net/amazon%e2%80%99s-mp3-store-on-hiring-spree-may-be-planning-major-relaunch/feed/ 0 http://www.invisionskins.net/the-kindle-dx-now-in-black-%e2%80%94-like-that-other-device-we-shall-not-name/ http://www.invisionskins.net/the-kindle-dx-now-in-black-%e2%80%94-like-that-other-device-we-shall-not-name/#comments Thu, 01 Jul 2010 08:23:11 +0000 admin http://invisionskins.net/the-kindle-dx-now-in-black-%e2%80%94-like-that-other-device-we-shall-not-name/

Amazon continues its revamping of the Kindle line. Fresh off of big price cuts for the

]]> http://www.invisionskins.net/the-kindle-dx-now-in-black-%e2%80%94-like-that-other-device-we-shall-not-name/feed/ 0