NewNet Winners and Losers of 2009

1Executive Summary

Updated: As the year winds to a close, GigaOM Pro’s crack team of contributors takes a look back at what went right, what went wrong, and for whom.

Winners

Twitter

2009 was a standout year for Twitter. Tweeting become a mainstream phenomenon, with celebrities falling all over themselves to start using the micromessaging service and news anchors talking about it almost non-stop. Twitter’s growth has been phenomenal – according to eMarketer, the number of adult U.S. users of the service grew by 200 percent between 2008 and 2009, to around 18 million users. Despite this growth, the scalability issues that had plagued Twitter in its early days (leading to the frequent appearance of the fail whale) seem to be largely a thing of the past. That’s important, because Twitter is no longer just a social networking and microblogging service — it supports a whole ecosystem of third-party apps that have grown up around it, among them photo-sharing tools (Twitpic, yFrog) and location apps (Gowalla, Foursquare). Twitter is the real-time messaging system that underpins and facilitates large swathes of the NewNet. – Simon Mackie

Foursquare

foursquare_logo_girlLocation-based social networking apps for mobile devices aren’t really a new idea. Indeed, Foursquare was co-founded by Dennis Crowley, one of the founders of Dodgeball, the location-based mobile social networking service that was acquired by Google in 2005 only to be shut down earlier this year. Yet Foursquare is succeeding where previous ventures have failed — and in the process, capturing the imagination of some well-known bloggers: Om loves it, for example, and Mashable’s Pete Cashmore says that Foursquare will be 2010’s Twitter. Foursquare doesn’t just let you log your location and leave reviews, however; users can unlock badges and awards in a manner akin to online gaming on Xbox Live. There are competing services — Gowalla, in particular — but Foursquare appears to have hit upon the right mix of addictive fun and ease of use to edge out the competition. By all counts, it will become the first mainstream location-based social networking app. – Simon Mackie

Government 2.0

The Obama administration took the government’s geek cred to an entirely new level with its appointment of both a CIO and CTO, its embrace of cloud computing and its requirement that federal agencies publish online as much data regarding their activities as possible. Even the FCC has a blog now. As that culture permeates the administration, it’s inspiring others, like Anil Dash, an industry luminary who helped found blog enabler Six Apart. Dash has created a nonprofit startup incubator dedicated to the government sector called Expert Labs that’s funded with half a million dollars in government grants. Similar efforts are taking root at the local government level, with cities like New York and San Francisco turning over their considerable stores of data to app developers. Meanwhile a new generation of Web 2.0 startups like CitySourced are focusing on using the web to make governments, and democracy, more effective.  – Ed Gubbins

Employee productivity

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Working for a big company used be a productivity death sentence, thanks to firewalls, Internet filters, outdated software, the awfulness that is Lotus Notes and more. But through a combination of factors — better available products, a growing desire for employees to work on the go and greater trust in the cloud — enterprise communications and collaboration tools have gotten a major upgrade of late. That’s thanks in large part to corporate adoption of web-based consumer-like tools such as Google Apps, which now has more than 20 million users at more than 2 million businesses, including Genentech, Motorola and Konica Minolta. Probably the biggest antecedent for this trend is the BlackBerry — which ironically is now becoming a consumer tool as push email and constant connectivity become integral to both work and play. While the cloud has the potential to be more reliable and perhaps more private, the fact is that today’s web productivity tools are both powerful and accessible. And best of all, you don’t need an IT department to tell you how to use them. – Liz Gannes

Facebook

2009 was the year of Facebook. Over the past 12 months, the Palo Alto, Calif.-based social network nearly doubled its revenues, inching closer to the half-a-billion-dollar-mark. It added nearly 200 million new users, taking the total number to more than 350 million. And it launched the service in multiple additional languages.

However, the biggest victory for Facebook came earlier this month when it convinced Yahoo to adopt Facebook Connect, thus providing a simple way for users of both sites to share information across them. The more sites that use Facebook Connect, the closer the social networking company comes to becoming the ultimate identity broker of the web, which in turn brings it closer to its ultimate goal: to organize the world’s relationships. With Facebook Connect, users send more data to Facebook’s brain, which the company can then use to sell smart, targeted advertising. It’s Google’s worst nightmare, because this highly personalized ad system has the potential to trounce that of Google’s. Yahoo essentially gave Facebook the keys to the web castle.

But Facebook is not immune to making mistakes. The company has continued to push the boundaries of acceptable behavior (including privacy limits), testing the patience of its community. Consumers are fickle; angry consumers, even more so. In 2010, Facebook would be well-advised to remember that. — Om Malik

Losers

Consumer Privacy

Bill_of_Rights_Pg1of1_ACAsked on CNBC in December whether consumers are wise to trust Google with their data, CEO Eric Schmidt said, “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.” That pretty much summed up the company’s cavalier attitude toward its users’ privacy in 2009. But a bigger threat to privacy may come from the government. Leaked documents from Yahoo, also in December, revealed a handy how-to guide for law enforcement officials as to how to get access to Yahoo users’ instant messaging logs. Meanwhile, MySpace alerted police of its ability to access a user’s ID for up to 90 days after the user deletes the account. And Sprint revealed in November that it receives some 8 million requests a year from law enforcement agencies for subscribers’ GPS data. Turns out your GPS whereabouts are not protected by the Fourth Amendment’s ban on unreasonable search and seizure, or the Fifth Amendment’s guarantee against self-incrimination. Apparently, Big Brother really is watching. -- Paul Sweeting

eBay

Though eBay doesn’t always get the credit it deserves, the company has been fantastic at anticipating web trends — e-commerce, user-generated content, the real-time web. (All fundamental aspects of online auctions.) But 2009 was not very kind to eBay, and first-mover advantage hasn’t been enough to help the company bounce back. In some ways more noteworthy than what eBay won in 2009 is what it lost: its big flashy Skype acquisition, which was harder to spin off than necessary due to intellectual property issues, as well as another experimental — but much smaller — buy, StumbleUpon. Meanwhile, back in its core products, eBay had lost its recession-proof quality of yore by shifting business to fixed-price sales and away from auctions. So what’s eBay’s next big thing? Mobile payments through iPhone apps (and an overall increased focus on PayPal) — smart. A new initiative to hop onto the trend-of-the-moment, online sample sales? Not so much. – Liz Gannes

Journalism

While various companies, from Google to News Corp, are experimenting with new monetization models for digital news, 2009 saw no such relief. The devastation seen in the traditional news business this year –- including widespread layoffs and longstanding major papers threatened with extinction –- accompanied a degradation of the profession on the Internet. Google proved itself a poor editor, rewarding plagiarism and herd mentalities and prompting publishers to focus more on packing in keywords than on good reporting. Breaking down the traditional packaging of news products, so that each story has to compete for eyeballs with the entire web, is increasingly pushing even some of the online publishing world’s most respected names toward prurient content. One day we’ll say (to paraphrase what Marge Simpson once said about the Fox TV network), “The Huffington Post became a hard-core porn site so gradually, I didn’t even notice.”

Yahoo

Yahoo spent much of this year trying to prove that it wasn’t a relic of the Web 1.0 era and to, as new CEO Carol Bartz put it in an email to employees, “Get out of the sugar low…stop staring at our navels.” But its biggest strategic move was to essentially surrender the display search ad market, outsourcing that work to Microsoft. Some have argued that Yahoo missed opportunities to do more in social networking, pointing to the popularity of its Yahoo Groups forums, for example.

But perhaps its biggest defeat was the surrender of one of its biggest advantages: the fact that it collects more data on its users than just about anyone. By joining Facebook’s Connect network — which overlays Facebook functions onto other sites, collecting user behavior there for advertising purposes — Yahoo is allowing Facebook to siphon away its vast stores of online identity data. Can this deal, too, be blamed on sugar? – Ed Gubbins

Offerpal Media

When TechCrunch founder Michael Arrington confronted Offerpal Media’s CEO Anu Shukla at an industry conference, accusing her point-blank of unethical business practices, Shukla didn’t back down, dismissing his critique in a string of expletives. Days later, Shukla was replaced by a new CEO (the company says the timing was just coincidence) who admitted to the bad behavior Arrington had alleged and vowed to clean it up. Arrington took issue with the company’s participation in the use of marketing promotions in exchange for virtual currency in online social games like those made by Zynga. To get to the next level of play, gamers were sometimes tricked into ordering products they didn’t want. A slew of lawsuits and an industry-wide effort to stamp out these scams all followed Offerpal’s public tussle. – Ed Gubbins

That’s our list. Who do you think we missed?

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3 Comments Subscribers to comment
  1. Yes, I meant “search” rather than “display.” My apologies. Thanks for pointing that out, jheerwagen. The text has been corrected.

  2. Don’t think Yahoo surrendered in display. They are actually going to sell display exclusively for MS to largest accts., right? Search, maybe.. A typo?

  3. I really like Foursquare, but I think they are going to have significant scale issues with the honor system. The potential for system-gaming is big on Foursquare, and if local vendors are going to start using Foursquare promotions I have to wonder if a higher level of verification is going to be required down the road.

    Overall though, I still think location aware social networking has immense monetization potential, much more so out of the gate than other more straightforward social apps.

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