Sense & Respond: Yahoo Launches Big Brand Universe

Yahoo! may have a lack of focus with regard to many of their properties, but they seem to be focused like a laser in launching a new strategy to engage media’s biggest brands online, with or without their participation.  Using their “sensing” muscle, Yahoo! has identified more than 100 properties that are the most popular, or fastest-growing, with its users.   Yahoo!’s “response” action is to begin building what it calls a “brand universe” Web site around each one.  Set to launch throughout 2007, they will bring content from throughout Yahoo!’s network into one destination for fans.

This is a really smart move for Yahoo!.  The inclusion of two social media heavyhitters (Flickr & Delicious) make the site much more authentic with users.  It’s co-creation without having to ask the customer to create anything.  Finally, it’s a destination that will satisfy most any search request.

The first “universe” is live and it’s for Nintendo’s new Wii console.  The site is a fantastic mash-up of Yahoo! properties including:

  • Flickr for fan photos
  • Yahoo! Games for articles, reviews, forums, and user videos
  • Yahoo! Shopping for purchase options including an in-stock tracker for web stores
  • Yahoo! Answers for user Q&A
  • & MyWeb for links to outside articles

They hope to partner with the companies behind the properties it selects to obtain extra content and potentially send some traffic their way, but the “brand universe” pages won’t hinge on their cooperation.

Yahoo! isn’t revealing the properties it has selected beyond the Wii, due to the sensitivity of ongoing talks, but names like “American Idol” and “The Lord of the Rings” are almost certain to be among them.

Source: Variety

Go to the Yahoo! Wii site here.

Chris Anderson: Less Is More

Chris Anderson is the editor of Wired Magazine. He is also the guy who first observed, researched & documented the phenomenon known as “The Long Tail”.  In early 2004, Anderson was asked to estimate how many of the 10,000 albums accessible via a Web-connected digital jukebox had at least one track played at least once per quarter. Sensing that traditional sales metrics, which would indicate an answer of about 20 percent, didn’t apply to this Internet-enabled example, he ventured an extreme-sounding guess of 50 percent. “I was, needless to say, way, way off,” he writes in his influential book, The Long Tail: Why the Future of Business Is Selling Less of More (Hyperion, 2006). “The answer was 98 percent.”

That revelation inspired Anderson to research the new rules of distribution and customer choice in the Internet Age. In a Wired article, then a blog, and now in his book, he argues that familiar sales charts are obsolete. From Inc. to eBay Inc. to NetFlix Inc., the data bore out his observations: The Internet allows companies to put a far wider range of goods in front of customers than a physical store ever could—and customers respond by buying not just the popular items bunched at the peak of the sales curve, but also the obscure products out on the long tail of the curve.

Moreover, those obscure products far out on the tail might only sell a tiny number of units, but when you add up all the individual items, they make up a large market. Long-tail products don’t replace hits, they replace the monopoly of hits enforced by the limitations of physical retail space. The long-tail phenomenon deals mostly with electronic media and deep-catalog businesses like books and DVDs, but Anderson touches on its impact on manufactured goods and commodities as well. In a recent interview with CIO Insight Magazine, Anderson spoke about the many long tails around us.

Our culture and economy is shifting from mass to niche markets. One size fits all was never a good model, but today, consumers have the power to reject it completely. The internet has allowed the customer to experience one size fits me and they increasingly expect and demand it.

Anderson comments that a growing number of industries as far ranging as heavy machinery to shoes now understand the long tail concept and are working it into their business strategies. In response, Anderson is extending his research by actively learning about those industries.

One observation is that applying a long tail strategy on a commodity business by introducing variety actually decommodifies it. Where have we seen this? The article suggests grocery stores (how many varieties of Coke and Pepsi have se seen in the last few years?). Most mass merchants and CE retailers started selling low-end guitars last year. I saw a few weeks ago where Target is changing the model this year by selling guitars autographed by various musicians. They have taken a commodity, added differentiation, and in the end, generated buzz, demand, and higher margins.

How will this play out in other businesses and what does it mean for physical retailers in general? Make no mistake, producers and retailers will have to answer the call of the long tail. It will soon be the cost of staying in the game. They will need to employ new tools to help them Sense & Respond to the desires of their consumers.

The rise of the Social Internet is making this easier for companies. People are actively sharing their ideas and opinions about products and brands all the time through blogs. That is a fantastic tool for companies. Instead of guessing or depending on feedback from a fraction of customers, they can access the relatively undistorted, honest feedback that is happening in the marketplace among the customers themselves.

The power has truely shifted from the organization to the individual and one of the bid enablers is the ability to search:

We are training a generation—the instinct to use Google to research a company is pretty hardwired in anyone under 30. Google measures links, the expression of respect and interest of other individuals. It’s kind of the ultimate filter for every issue. Your brand is no longer what you say your brand is. Your brand is what Google says your brand is, what individuals think your brand is. When Dell can spend hundreds of millions of dollars talking about its great customer service, and a couple of bloggers can make “Dell hell” show up on the first page of search results, the power has shifted from institutions to individuals.

The smart companies will embrace the long tail and partner with their customers to co-innovate, co-design, co-create. Essentially, enable the customer to have it their way.

2006 In Picture

If your interests lie in the areas of Marketing, Design & Creativity, you should immediately add David Armono’s excellent blog – Logic + Emotion – to your favorites.  David always has great observations to share, but he also has the gift of being able to express his ideas in both words and visuals, many of which I have hijacked for posting here and for use in my dayjob.  This week, he asked his readers to comment on this question:

What was the most significant event/aspect of 2006 in regards to marketing, advertising or user experience?

He plans to create “one more visial before the end of the year” using the responses as the source content.  There are already lots of comments, but it’s not too late to add your voice

Here’s what I said:

Wow, I’m a little late to the party. After reading all the great comments, I would have to say that the one biggest thing is that there were so many big things. Old school term: “Critical Mass”; new-school term: “Tipping Point”. Either way, 2006 was the year that the individual took control of the technology in order to become the media.

We have been shifting media power to individuals for years now. Perhaps it started with the VCR. The internet shifted control of retail to the customer years ago. Today, individuals have the power to control markets, create and distribute their own content, build and occupy virtual worlds with new opportunities for commerce and entertainment. They don’t have to rely on some corporation to provide the experiences for them. They simply use the new tools, which they are mastering as fast as the tool developers can build them, to build whatever they want, to be whoever they want to be and to let their voice be heard.

As a response, some corporations are starting to understand that they have no choice but to embrace the new paridigm and the innovators, the risk-takers, the ones with vision understand that co-creation can be a strategic asset.

Sony Delivers Even Less PS3’s Than Planned

Not good news for Sony (and lots of hungry young gamers with $600 in their pockets for that matter), but I doubt Nintendo or Microsoft is feeling bad.  Rumor has it, that Sony shipped less than the already reduced 400,000 PS3 consoles it said it would have in stores last week.  By now you’ve all seen or read about the craziness that surrounded the release of the PS3 last week…that craziness ranged from gun shots being fired at one store in Connecticut to near riot conditions in front of several Best Buys and Circuit City’s around the country.  In one word, pathetic.  On the other hand, the mainstream media and bloggers alike were quick to pick up on the “civility” of the Nintendo Wii release…no gunshots, no riots, just a chock full of courtesy and a side of friendliness.  It probably doesn’t hurt that Nintendo shipped about five to ten times the amount Wii’s compared to what Sony shipped for the PS3. Supply and demand at its finest.

<via GenDigital>

The Coming Camcorder Conundrum

Is the traditional camcorder going the way of the VCR.  Recent trends indicate that the answer is “yes” and its a big problem for camcorder makers and CE retailers. 

Sales of camcorders have fallen 6.7% to $785 million so far this year, according to researcher NPD.  In a recent article entitled The Coming Camcorder Conundrum, BusinessWeek points out that the traditional camcorder is being replaced by……. wait for it……. the Cellphone.  Consumers are also opting for low-cost, flash-based, disposable recorders.

“Many consumers are looking for less expensive, less complicated machines, and in growing numbers they’re adopting devices on the low end. Pure Digital Technologies specializes in disposable, point-and-shoot, flash-memory-based camcorders. Its latest point-and-shoot model, released in October, holds up to 60 minutes of video and sells for about $129.”

Pure Digital understands what most people are doing with video these days.  They are creating content for distribution on the web and Pure Digital is building disposable camcorders that interface to Google Video and Sony’s Grouper.  A YouTube interface is in the works.  Pure Digital believes that the traditional camcorder market, reaching fewer than 3 million units a year, will expand to more than 20 million devices sold as disposable and point-and-shoot camcorders proliferate.

The phone manufacturers are on the same track.  The quality available on phones and other low cost devices doesn’t compare to today’s high-end camcorders, but they make up for it in ease of use and price, and over time, the quality will get better.

The Success of Wii

Seth Godin has a nice post on his blog about the Wii.

“Sony is losing hundreds of dollars on every one they sell, supply is limited and …people are getting shot in the frenzy to buy the game.”

“And yet Nintendo hums along, with great reviews, plenty of supply and a long-term hit on their hands.”

“What’s up?”

While Sony postures itself like an aging rockstar, promoting it’s overpriced, proprietary scheme for dominating your living room, Nintendo continues to focus on the gamer’s experience.  In the end, it’s the experience, not the technology that will win the devotion (and dollars) of gamers.

New Amazon Feature: Part Gameshow, Part Market Research

Amazon Votes 01

Karl Long over at Experience Curve posted about an innovative new feature that Amazon is running:

Nice little interactive “e-tailing gameshow” from Amazon, essentially they are putting up 4 products with super low prices ie. xbox for $100, or a full suspension mountain bike for $30. The community votes on which product they want for the cheap price. The winning product will have a limited quantity (1000 xbox’s), and will go on sale on thanksgiving day at 2pm EST.

No surprises on what people are voting for…. the $100 xbox.

Dell Sets Up Shop In SecondLife

Dell SL Main Island OK, I lied!!! I said I wouldn’t post anything else about SecondLife this week, but the news keeps coming. Dell announced yesterday that they have set up shop in SecondLife making virtual computers for avatars. They made the announcement in Secondlife, a trend that is becoming pretty common and generally annoying realworld business journalists. From Dell’s press release:

“Innovation has always been at the core of Dell. Innovation coupled with the idea of working directly with its customers has now led Dell to participate in Second Life, one of the hottest, most popular 3-D virtual worlds.”

“Tuesday, November 14, Ro Parra, Dell senior vice president and general manager, Home and Small Business Group, and Philip Rosedale, Linden Lab founder and CEO, gave an exclusive preview of Dell Island in Second Life. Following this invitation-only event the island was open for the public to visit.”

Why is Dell going here? It certainly isn’t to make money from virtual computer sales, but you can buy a real PC on their island and have it shipped to your realworld address. In light of the other announcements this week regarding IBM and Amazon, this is beginning to validate the belief of many (including me) that the future of commerce on the internet is 3D.

More pictures of Dell’s virtual facilities are here.

Second Life Residents Build Stores Around

OK, I promise this is the last post about Second Life  for this week, but since I blogged about this way back in June, I just gotta tell you the news.  Several Second Life residents have set up shops on the world’s most popular retail shopping site,  They want to use its virtual environment to actually sell physical goods via

Linden Lab of San Francisco, creator and operator of Second Life, doesn’t track the Amazon goods sold, since Linden doesn’t make money from the sales.  Nevertheless, the extension of’s reach into a place with more than 1.3 million residents has potential for big sales over time, given Second Life’s growth rate.  Since September, the population of the online world has jumped from 735,000 subscribers to more than 1.3 million.  Second Life residents do a total of about $6 million worth of business a month, up from about $2 million a few months ago.

This is an unprecedented linkage between one of the largest online virtual worlds and the world’s largest (physical) online retailer.  Inhabitants of the Second Life online universe will now be looking for real-world money by setting up stores powered by, Inc. (NASDAQ:AMZN).

I have to imagine that anyone savvy enough to reside virtually in Second Life and build a community in that environment probably already knows about’s role as a real-life provider of goods.  But that’s not what’s at stake here.

Turning a “browser” into a “buyer” requires the right combination of mood and environment — and Second Life inhabitants are by nature more tuned in to this than most.

As for Amazon, the 1.3 million citizens participating in Second Life ain’t no small potatos. That a demographic ripe for mining.  Now whether it becomes a fixture in Second Life will be left up to its members, as they are the ones who will continue to build the revenue-sharing virtual stores and write the scripts needed to integrate with Amazon’s web services for third-party retailers.

Second Life Residents Build Stores Around – News by InformationWeek

A $10 Million Investment In SecondLife from IBM is the Latest Push to Build V-Business

IBM employees in Second Life at a break-out session after a keynote address.

I’m not sure if this post is about SecondLife, Innovation, Co-Creation or all of the above.  Read on and you can decide.  This past Summer, IBM conducted the latest in it’s series of “Innovation Jams“.  The “Jam”was conducted online over the course of 72 hours.  During that time, every IBM employee was invited to join in a candid, broad-ranging exploration of enterprise-wide issues, challenges and opportunities.  IBMers were asked to post ideas on specific issues and topics, build upon the ideas of others and rate the ideas that had the greatest potential to transform their company.  Everyone — from the CEO to a college intern fresh off campus — had a say in the matter, and this time, they invited customers to participate. 

IBM pledged to invest $100 million on the best ideas to come out of the Jam.  One of the four markets explored was called “Going Places” and it focused on topics such as travel, transportation, and virtual experiences.  I participated in the discussion and being fascinated with Secondlife, I spent most of my time in this area of the forum.  The discussion around virtual worlds and SecondLife in particular was enthusiastic and there were apparently enough good ideas to convince IBM to put 10% of the kitty into developing a presence in SecondLife.  

Reuters has a story up about IBM’s continued push into Second Life and other virtual worlds: IBM accelerates push into 3D virtual worlds

IBM has embraced Second Life to an extent unmatched by any other major company — it has more than 230 employees spending time in-world, and it owns some half-dozen islands.  Some are open to the public, but most are private, with restricted access for the public.  In the Reuters article, Chairman and Chief Executive Sam Palmisano (photo & Second Life avatar to the right) talks about these efforts:

Big Blue has already established the biggest Second Life presence of any Fortune 500 company. It is also looking to build a 3D intranet where its clients will be able to discuss sensitive business information.”

 According to the article, he will be meeting with “in-world” employees on one of IBM’s private Second Life islands on November 14th after a real world town hall meeting with 7,000 employees in China.

So far in Second Life, IBM has set up a simulation of the Wimbledon tennis tournament, using data that tracks the position of the ball to re-enact points several seconds after they happen.  It has also held virtual events such as an IBM alumni reunion.

IBM has it’s very own “multiverse evangelists”.  IBM created these visionary positions within the company to go out and preach the virtues of virtual worlds to their customers and to the world(s).  These evangelists recently detailed IBM’s Second Life activities in another Reuter’s article:  IBM eyes move into Second Life ‘v-business’

Seeing how they practically coined the word “e-commerce”, you have to think they are serious about this emerging v-business.  Sam Palmisano is quoted in the article as saying,

We always ask the question, ‘if you knew 20 years ago what you know about the Web today, what would you do differently?’” Sandy Kearney, IBM’s director of emerging 3-D Internet and virtual business, told Reuters in a Second Life interview.

The Web took decades. This will likely take half that time.

Irving Wladawsky-Berger, Vice President, Technical Strategy and Innovation, IBM Corporation wrote about IBM’s efforts in virtual space in his blog with:

Transforming Business through Virtual Worlds Capabilities – it’s Déjà Vu All Over Again

In his blog article, Irving Wladawsky-Berger writes,

About two years ago, a study conducted by the IBM Academy of Technology concluded that technologies and capabilities from the gaming world would have a very strong impact on all aspects of IT, and made a number of recommendations for follow-on activities, which we have proceeded to implement.” 

Irving goes into great detail in his blog about how IBM is entering virtual space, and what they are finding out about doing business in virtual space.  It’s well worth the read!

The one thing that has always defined IBM is that they are pretty good at being the middleman, the broker between disparate systems.  If you are an IT Director, and you have a mix of hardware and software systems, IBM can come in and help you to get it all working and talking together.  There’s a very revealing quote in the latest Reuters article on 3D virtual worlds, and I truly think this exposes the (virtual) space where IBM wants to dominate:

A spokesman for IBM said its goals go far beyond Second Life, although it currently has its largest virtual world presence there, and that the company eventually wants to see all multiverses integrated into a seamless whole.

That seems to be the core strategy with IBM and v-business, to be the glue for all of the virtual worlds that may emerge.  We will never have a single all encompassing virtual world controlled by a single corporation, it’s just not going to happen, and it’s never happened in the past with any other technology.  Do you think that maybe a few IBM employees have a copy of Neal Stephenson’s Snow Crash on their office bookshelves.  Can you say “Metaverse”?  Hardware is dead; look at the sell off of IBM’s flagship ThinkPad division to China.  This is the future direction for IBM, and an extension of what they already do very well.

Irving closes out his blog entry with this observation: 

So, here we are in 2006, once more facing a set of fledgling technologies and capabilities — massively multiplayer online games and virtual worlds – that are already being used by many millions out there.  Once more we have the very strong feeling that this will have a huge impact on business, society and our personal lives, although none of us can quite predict what that impact will be.  It will be fascinating to see where this ride takes us in the future.”

Fascinating Indeed! 

Credit where credit is due:  Parts of this post were taken from a fellow WordPress blogger here:

Second Life is Not Over-hyped…

David Kirkpatrick, Senior editor for Fortune, says that Second Life is not over-hyped: it’s a preview of the future of the Internet.

“That’s because what it really may represent is an alternative vision for how to interact with information and communicate over the Internet….Looking at Second Life makes me realize just how much the Web, wonderful and useful as it is, still mimics a print model.”

This May Be the Future of the Web.
I’ve been evangelizing for a while now that SecondLife offers a great platform for innovation, but I also think Kirkpatrick is on the mark when he says that the Internet of the future is more likely to look like Second Life’s 3D metaverse (my avatar: Horace McFly) where people can interact in real time, than it is to remain the one-dimensional, text-based world we’re used to.  Most of my business colleagues don’t share my enthusiasm for the medium.  They think it is a game where people who have way too much free time waste as much as they can, but as Kirkpartrick (avatar: David Liveoak) explains very well, it really is all about business. 

“We are all lathered up about the success of News Corp.’s (Charts) MySpace. But the social networks of the future will probably be much more than merely a bunch of Web-site-like collections of data, as MySpace is today. MySpace beat Friendster, the previous champion social networking site, by allowing its members much more freedom in how they created their pages.”

“Second Life goes much further. It took a radical approach to design from the beginning. It offered itself as a mere platform for the creations of its occupants. Essentially everything seen inside the software today was created by its users.”

Whether Linden Labs will be able to overcome Second Life’s shortcomings of requiring a software download that corporate servers prohibit, and requiring a level of geekiness way beyond that of most execs, remains to be seen.  But one 3D world or another is likely to achieve the scale of Google or MySpace in the Internet’s not too distant future.  My bet is that it’ll happen within five years.

When Fewer Choices Mean Bigger Returns

One of my deeply held beliefs regarding Customer Experience and Loyalty is that if you act as an advocate for your customers, they will reward you, not only with their business, but by advocating for you to their network of friends and family.  There are many ways to be an advocate for your customers (and potential customers).  One of them is to find ways to keep them from becoming overwhelmed with choice. 

American society has become all about choice and most of us believe that all this choice is good.   After all, it seems reasonable that we live better lives than we did 20 or 50 years ago, when the American economy was less advanced.  Thanks to the ever-increasing pace of business, enabled by PCs and the internet; along with changes in business models, social values & government policies, choices now dominate the activity of our every day lives.  We should get satisfaction from all of this choice, but the fact is, it is making us unhappy.   It’s what the folks at Blackfriars Communications call “The Tyranny of Too Much“. 

Think about how it feels when you open a restaurant menu and see dozens or even hundreds of items from which to choose.  Almost makes you lose your appetite, doesn’t it? There’s a reason why all of the big fast-food chains now feature a handful of combo meals on their menu—they’re more profitable for them, to be sure, but they also make their customers’ lives just a little bit simpler.

This approach has been a part of Costco’s success for years.  They have a small but high quality selection of just about everything.  Their buyers do the work of selection a handful of high quality items across several pricepoints so I don’t have to decide between 18 different toasters (for example).

According to a story at BusinessWeekOnline, WalMart(WMT), which has not historically been known as a great customer advocate beyond offering low prices, is currently running a radio commercial in which boasts about how small its selection of HDTVs is.  The spot wasn’t apologizing for Wal-Mart’s lack of selection, nor was it saying the fact that Wal-Mart carried fewer options than the competition didn’t matter.  The commercial actually touted the fact that Wal-Mart had improved the HDTV buying process by limiting its selection to only the most popular models.   That perked the author’s attention:

“I have been pondering the purchase of an HDTV for some time now, but dreading the long hours of research I was going to have to put into the process. I’ve read a few articles that explain the differences between plasma screens and LCDs, between $3,000 starter models and $10,000 big dogs. And I’m more confused than ever.”

“What Wal-Mart did was counterintuitive, but like AOL’s strategy during the early days of the Internet, it’s right on the mark.  Conventional wisdom suggests that having more HDTV options under one roof is better for consumers.  After all, if a retailer carries all of the options, it’s more likely to be able to meet the needs of every customer who walks through the door.” 

“What Wal-Mart has recognized, however, is that most people’s purchasing needs aren’t merely tied to product features.  Early adopters aside, most people don’t need or want to not spend hour after hour sorting through product reviews and comparison charts to find out which model is best.  Most need to know that when they plunk down two, three, or four thousand dollars (or more), they’re going to be happy with their purchase.  And they need to know that in two years they won’t be stuck with obsolete technology. (Betamax, anyone?)  If they can go to Wal-Mart and choose from a handful models that will do the job just fine for the average person, they will be happier than if they are required to sort through 40 or 50 models at Best Buy (BBY) or Circuit City (CC).”

Wow, that’s powerful stuff and I think they may be on to something.   More isn’t always better.  Too many choices are often too confusing, and too much selection can become a burden, not a benefit.  Whatever industry you’re in, if you can avoid the Tyranny of Too Much, you are acting as an advocate for your customer.  That will drive loyalty, and simplify your own life as well.

Challenge the Orthodoxies!!!

Last year, I had the opportunity to work on business strategy development for a major retailer. We leveraged the work of innovation guru, Gary Hamel, and his company, Strategos, to complete the process. One of Hamel’s prescriptions is to challenge your orthodoxies; the things you believe to be true about your industry or business.  In doing so, you can begin to see new opportunities.

I am a big fan of David Armano’s blog, Logic+Emotion and this week he posted a link to a fantastic video example of the power of this concept.  It runs about two minutes.  Be sure to stay with it until the end.  The twist is well worth the wait.  As you watch, think about your own orthodoxies.  What opportunities are you not seeing because of them?

To give credit where credit is due, David first saw this on Drew McLellan’s blog,

Urlocker: What Failing Newspapers Tell us About Microsoft’s Pending Flop, Vista

Disruption Consultant Michael Urlocker has a thought provoking post on his blog that suggests that Microsoft and the entire PC industry may be reaching a point where it’s complexity and functionality has evolved beyond where they have surpassed the needs of most users.   He proposes this possibility through the lense of the newspaper business, which despite successes using new designs in the 1980’s (USAToday), have been unable to stop a steady downturn in readership over the last few years.

When a proven management method fails, it may be a signal that the market is over-shot. Typically in such cases, suppliers continue to innovate and improve on things that no longer matter to customers.

Clearly this is occuring in newspapers and we may draw a similar conclusion, tentatively, about PC operating systems, hardware upgrades and new software applications. Just as the periodic newspaper redesign of the 1980s paid off, operating system upgrades created the market boom for companies like Microsoft, Dell, HP etc
This raises a question: Is that boom over?

Overshooting customer needs is a core element of disruptive innovation because an overshot customer base will include a segment that will likely accept a so-called inferior product if it meets some other important needs

Read the whole post here

Is This Your Next Mobile Phone???

SamsungSamsung Electronics presented their new three-way foldable combination of phone, personal computer and music player tailored for an emerging wireless broadband technology the company is pushing as a global standard.

The new device was unveiled at a Samsung-sponsored industry conference on Mobile Wi-Max – a new technology delivering faster remote broadband connections.

Its called MITs, which stands for Mobile Intelligent Terminal by Samsung.   It weights about a pound and contains a fold out keyboard, 5-inch screen, 30GB hard drive, and Windows software. 

It is scheduled to be released in South Korea in early 2007 with Intel, Sprint Nextel and Motorola all looking to commercialize it in the States soon thereafter.

Samsung Electronics unveils new communication device tailored for WiMax