Will the setting of Facebook’s stock price be the equivalent of The Crying Of Lot 49?
Dave’s had a Yahoo! account like since he got rid of his Prodigy account… or was that his Compuserve account. Suffice it to say Dave’s been around even longer than the internet and if you think because Dave is old, Dave doesn’t know what’s up… you would be wrong.
For less than $10 million, as a matter-of-fact, entirely for free (i.e. cognitive surplus) Dave is going to tell readers exactly what he would do if Yahoo! decided to TradeWithDave by making Dave CEO of Yahoo! Keep in mind Dave had his first fully e-commerce enabled website in 1997. That means if you got your driver’s permit this year then Dave was on the web before you were born. Once again, don’t confuse being old with being dumb just because it is old people at Goldman Sachs that are taking Facebook public and young people that are cashing in. There are plenty of young people who are dumb too… it’s not an age-specific condition and neither is lying on your resume’.
What’s Dave’s great idea for Yahoo! It’s simple really. Charge people 99 cents for the URL they are looking for. That’s it. Sell URL’s. Sell URL’s?… you ask. That’s right! Sell URL’s. Is Dave talking about selling domains like Danica Patrick for GoDaddy? No. That’s domains and web hosting. Dave’s talking about selling domains like bit.ly links to domains for Twitter. Is Dave talking about setting up something like Twitter? No. Dave’s talking about setting up something like Gumroad. To be more accurate Dave is saying Yahoo! should simply become Gumroad. How does this make money exactly you ask? That’s simple. Dave will explain.
Okay, do you remember Demand Media. They are the guys who gamed Google’s search engine and went public at $20 per share and now trade for $8.50 per share. How did they do that? Well, they paid writers like Dave to write three page articles answering questions such as “How do I get stink bugs out of my home?” or “What country was Barack Obama born in?” These articles are then published to the web and when people go to Google and type in “stink bug” or “birth certificate” the pages that contain the Demand Media articles are supposed to pop up on your screen and there are advertisements on those pages that make money for Demand Media (that is if you call spending $20 to make $8 making money).
This is called gaming an algorithm and if you don’t know what an algorithm is you can ask Google and Demand Media has probably paid someone $40 to write an article about algorithms that will be one of the search results. If you find the page it will probably have an advertisement for Phoenix University where you can spend your student loan to get a math degree who in turn pays Demand Media for the advertisement on their article page.
Back to what Dave would do with Yahoo! Like I said I would sell URL’s, but not in the Godaddy way, instead, I would sell hidden URL’s that you can’t find easily by searching the web. These URL’s would be ranked by users who used the system (that is the new Yahoo! system where Dave is the new Yahoo! CEO) just like Reddit ranks posts. Instead Dave’s new Yahoo! would rank the semantic web rather than the regular web. Then Dave would take those highly ranked pages and sell access to them for 99 cents bypassing the advertising industry and Google entirely. Just giving you the best possible answer to the question you asked while not relying on a paid writer for Demand Media, an algorithm from Google that supposedly ranks “relevancy” or lists from Craig, or Angie or some blogger named Dave. Nope, you’d be looking at a fully curated document based on the rankings of millions of web users just like Wikipedia is a curated document based on the unpaid contributions of millions of web users with a key difference. Dave would pay you to trade your time with Yahoo!
Are you confused yet? Well, first of all you need to know what the semantic web is. Secondly you need to understand how Gumroad works and how you can sell a “ticket” to view a page rather than selling the page itself by making you look at advertising that may or may not be relevant. Here’s an example. You want to know what the best cure for Dandruff is and you’re not really that interested in looking at advertisements for Head & Shoulders because you’re not buying what they’re selling. Enter the semantic web, but not just a semantic web for free like Google and the internet, but a semantic web you can sell so you don’t end up like Demand Media’s stock price.
Dave could spend an hour trying to explain the semantic web to you, or you can just watch a video at this link. Suffice it to say, that the semantic web is the difference between typing in the words “trade” and “dave” into Google and hoping that you can find that blog you forgot about, as compared with typing into a search engine “I used to read a blog written by this guy. I can’t remember his name but he wrote about business and ideas and it was free” and for 99 cents it would take you right to tradewithdave.com. That’s the semantic web. How does it do that? It does that because of all the relationships you have to everything that you do that the semantic web knew exactly what you were asking about. Here’s the explanation: http://www.youtube.com/watch?v=bd8zR0v7Jts
So how do you do something like this? Well, you do it the same way Reddit.com works through human curated up-votes, but within the realm of relationships that is relevant to you or relevant to what you are doing… your projects.
SilkApp.com just offered their new semantic database as a free download. Gumroad just offered their 99 cents URL ticket sales model to anyone that wants to use it. What’s keeping us from mashing up Reddit with Gumroad with Silk and calling it Yahoo! by turning Yahoo! into the first human curated web search engine where you pay for human curated rankings in answer to your questions? The obvious question is who is going to pay human beings to curate web pages while we’re waiting for Tim Berners-Lee version of the semantic web to be built in the form of everyone loading their data up on to the internet. The answer is you are in the form of the 99 cent payments to quickly find the answer to the question that you’re asking. That is assuming that the answer to the question you are asking is increasingly not found in the “relevant” results pages of Google search or in the publishing of advertisements along the right-hand column of your results pages. If you’re happy with those results, then you can simply keep using them and if you’re not, then you can use the human-semantic web.
Dave has corresponded a bit with Craig Newmark, the founder of Craig’s List. Now that Craig has successfully wrangled up the equivalent of classified ads for the world, he’s trying to figure out how to get the concept of trust into his corral. If you look at another listmaker of the fairer sex at AngiesList.com you find a website that uses human-curated reviews to help you find a trustworthy person to refinish your bathtub or to add that third bedroom onto your home. Angie’s List is an increasingly successful approach to a relatively narrow niche market (home improvement) and an attempt to combine human curation with the great list-making ability and search capabilities of the web. The same basic feedback loop model applies to the Yelp.com and dozens of other personal review sites. In other words, you can say that no one would pay to search the semantic web, but Angie would tell you people don’t pay to search the web, they pay to get their bathtub reglazed while not having their purse stolen from their own house. That’s worth 99 cents or in Angie’s case a bunch more.
Just look at Fannie Mae, Fair Isaac and Beacon Scores and their impact on the mortgage meltdown. What would it be worth to Wall Street to be able to monetize subjective reputation as ranked by real people rather than by a credit score that may have been impacted by unforseen outside forces or positive and negative impacts that had little or nothing to do with credibility? This next round of development is about reputation management and using software to game your Facebook account is what this is all about. All your friends are rich, then you’re probably rich. You’re friends are meth users, then you’re probably a meth user. It’s behavioral economics enabled by the user whether that user is using a platinum American Express or a stolen bicycle.
Is Dave suggesting that Yahoo! simply turn into Angie’s List or Yelp? Not exactly. What Dave is suggesting is that if Google is Visa and MasterCard and Bing.com is American Express then Yahoo! should become Discover Card. Yahoo! needs to be the first major internet portal, search engine, news aggregator and email service that pays its customers to use the site the way Discover Card pays its customers to use the card. Through taking Google’s cost-shifting strategies one step further and turning them into downright cash rebate models, Yahoo! would overnight become relevant again. To take this a step further, Yahoo! could pay web publishers to build their sites based on new semantic data-driven protocols such as Silk.com and to publish them to an exclusive Yahoo.web.com type of semantic web and what you would have is the equivalent of Wolfram Alpha meets a Bloomberg Terminal overlayed by the Library of Congress. Folks like Lexis-Nexis, Hoovers and many of the other pay-to-play databases that are still standing would be stunned. Would such a model for the web have high-paid young analysts at every investment bank and private equity group shaking in their Gucci loafers? No. Their loafers would be sitting on the shelf in a pawn shop.
Dave ran a simple test last week of putting up a link to a video interview of the founder of Gumroad.com explaining how the service worked. Dave said “Pay me 99 cents to see a video that explains the future of the web” and people did it. The response rate and the conversion rate were classic direct marketing metrics. Of the people who read the opportunity about 7.5% clicked through to find out more. Of the people that clicked through about 5% actually executed a transaction by putting in their credit card and paying the 99 cents. Dave has run direct marketing companies before and knows that response rates of 2, 3, 4 % can be very profitable in a conventional surface mail based direct marketing business. In an web-based model figures like the ones I experienced would be off the charts for profitability.
Does Dave think that Yahoo! is going to hire him to be the CEO? Would Dave even take the job if they did? Will Yahoo! simply go the way of Compuserve, Prodigy, AOL.com and MySpace? Most likely that’s what will happen. What is the future of the internet if a URL itself becomes a form of exchangeable currency? Will you walk the streets of China Town in New York and find shops with direct URL’s that start with http:// instead of www. being sold for half of the 99 cent minimum price of Gumroad’s business model? Will people approach you wearing a trench coat only to open the coat revealing counterfeit URL’s hanging alongside fake Rolex watches… “Hey buddy, want some smokin’ URL’s?” Is the semantic web just the harsh reality that when we built the web the first time we judged the book by the cover rather than the content and as Clay Shirky says that in reality “Content isn’t king” but labels on your web pages actually are.
Dave was around when bar code labels were developed for retail and Dave even remembers competing standards before the global standard of UPC codes won the day nearly forty years ago. Dave knows what it means for business to operated on a standard that everyone agrees on whether you’re talking about Tim Berners-Lee HTML code of the UPC code on the back of your Peter Pan peanut butter. Dave also knows that once we do operate on a single standard that whoever hands out the codes will control the web through the development of proprietary standards similar to GS1: http://en.wikipedia.org/wiki/GS1
Sounds like Dave is saying that for Yahoo! to be successful it needs to set the new global standard of paying people to help it re-build the semantic web and in doing so it would create another dimension of tracking. That’s the problem. As we all become increasingly dependent on a virtual network and its subsequent effects for our own existence rather than physical networks (think Amish and you get the picture) we find it necessary to submit to that network whether in the form of exorbitant monthly fees for connectivity and never-ending technology upgrades or simple 99 cent transactions. For those of you who haven’t been entirely sucked in yet, Dave’s suggestion for Yahoo! is that it start paying you to use your credit card so to speak because the information gathered from your participation is so valuable to the building out of the global technology system that Dave simply calls “The Beast.”
We’re going to witness first-hand how what was the richest young man in the world who was the legacy of building the Olde World’s communication system was displaced by a new richest young man in the world who replaced that system. You have probably never heard of The Princely House of Thurn and Taxis and Albert Maria Lamoral Miguel Johannes Gabrial, but you have heard of Facebook and Mark Zuckerberg. Mark Zuckerberg replaced Albert Prinz as the richest young man in the world. Interestingly Facebook replaced the post office and a good chunk of the home telephone line as a form of communication. It was the post office network of Europe that made Thurn and Taxis one of the most valuable businesses in the world for four hundred years.
The semantic web and Facebook for that matter are the equivalent of not only replacing the post office, but allowing the network to read the mail as it passes from one destination to the other. It may only be your Facebook “friends” who can read your messages or the National Security Agency that scans blog posts and emails for the word bomb, but once folks start getting paid to fill out the missing information with cash back rewards like so many cash payments for recycling aluminum drink cans, how long will it be before every loose piece of data floating around out there will be tagged, bagged, redeemed and recycled. Dave’s paying 99 cents today for photos of Bruno Iksil as a perfect example of the diminishing returns when TMZ meets the semantic web.
If Dave is correct and in the search for alternative currencies, yet another has been uncovered in the form of URL’s themselves, then we are one step closer to the semantic web which means you are one step closer to needing a URL yourself to buy or sell anything… and that no man should be able to buy or to sell, save he that hath the mark, even the name of the beast or the number of his name. Revelation 13:17
Here’s a link to Dave’s post from last week where he stepped on something sticky called Gumroad.com: http://tradewithdave.com/?p=10246
Here’s Dave’s historical and epic perspective on what makes Facebook combined with your mobile phone a “moveable beast” :