Algorithms driven Entertainment
Of course, we’ve all noticed that the stigma has now gone off the Dotcom businesses. These days, in Silicon Valley, it is Internet investments that are hot again. Chips have taken a hike to China, Software has fled to Oracle or to India, Communications remains interesting still, in select niches … BUT, the action is once again in the Dotcom style businesses.
Scott Rafer makes a very good point, however, in his analysis of Newscorp’s recent spending spree:
NewsCorp’s challenge is not whether they can acquire companies for lots of cash, but whether a media company can avoid screwing up the innovative technology approaches of these companies. Scott Sassa’s bumpy ride at Friendster had nothing to do with his skill as a media executive — Friendster was (and is) simply not mature enough to be operated like a media company. Instead of owning the next-gen dating market as they might have, Friendster is two years into a $13M venture round and their traffic is declining. Semel is doing a phenomenal job at Yahoo, but notice that he showed up after Koogle — not before. Yahoo’s recent Flickr identity faux pas shows that even they must be careful not to screw up their acquisitions.
Indeed, innovation in Internet Investments is still not mature enough where media executives can take over. It is those tech cow boys who know the vagaries of this rocket-speed innovation, especially, where to insert algorithms to get defensible leverage …
My hypothesis for the Web 2.0 Internet Investments (whether that is Entrepreneurial or Intrapreneurial): Algorithms driven (Entertainment+Community+Media+Commerce).
Pay attention to the embedded system that lies / will lie at the heart of the Internet businesses, for that’s where the opportunity to differentiate lies.
