The Open Strategy

The Open Strategy -- or how I stopped worrying about my web site and learned to love the whole Internet Matt McAlister Head of Guardian Developer Network Guardian News & Media

• Why care about openness • Platforms and ecosystems • Opening out and opening in • Business beneﬁts

How big is the Internet? 1 Billion Internet Users!

How big is the Internet? 1T Google’s Search Index 26M 1B http://googleblog.blogspot.com/2008/07/we-knew-web-was-big.html

http://www.ﬂickr.com/photos/garibaldi/349036152/

http://www.ﬂickr.com/photos/itsaboyd/2344155276/

Ad networks embed themselves wherever the users are Top 15 Ad Networks March 2008 Total U.S. – Home/Work/University Locations Total Unique Visitors % Reach (000) Total Internet : Total Audience 188,010 100.0 Platform-A* 170,537 90.7 Yahoo! Network 160,336 85.3 Google Ad Network 152,048 80.9 Specific Media 145,554 77.4 ValueClick Networks 140,091 74.5 Tribal Fusion 135,640 72.1 Casale Media Network 129,399 68.8 DRIVEpm 124,333 66.1 adconion media group 117,469 62.5 interCLICK 108,818 57.9 Traffic Marketplace 105,420 56.1 Collective Media 100,151 53.3 24/7 Real Media 94,525 50.3 ADSDAQ by ContextWeb 94,459 50.2 Burst Media 93,291 49.6 Source: ComScore, April 2008 http://www.comscore.com/press/release.asp?press=2184

The Google content network reaches over 75% of unique internet users in more than 20 languages and over 100 countries. As a result, if you advertise on both the Google search network and the Google content network, you have the potential to reach three of every four unique Internet users on Earth

Go to where the users are “In the new distributed world you want to be where the people are. The media brand is less a destination and a magnet to draw people there than a label once you’ve found the content, wherever and however you found it.” - Jeff Jarvis, Buzzmachine, “APIs: The new distribution”

“Although NPR.org is still critical to our strategy, we can no longer rely exclusively on the site as a way to reach people.” http://www.npr.org/blogs/inside/2008/11/nprs_open_content_strategy.html

http://www.ﬂickr.com/photos/heliopaz/2007012694/

The Open Strategy OPEN IN OPEN OUT Drive engagement Increase reach by by bringing in distributing services from the services across the Internet Internet

Platforms and ecosystems

“The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen.” Clay Shirky, “Newspapers and Thinking the Unthinkable”

Ecosystem dynamics Hosts Food chains Parasites Producers Reproduction Consumers Waste products Evolution Fuel and energy

http://www.stevenberlinjohnson.com/2009/03/the-following-is-a-speech-i-gave-yesterday-at-the-south-by-southwest-interactive-festival-in-austiniif-you-happened-to-being.html

Platform concepts compared HBR, “Platform-Mediated Networks:Definitions and Core Concepts”, Jan 2007

Related example: Motorcycle manufacturing “In contrast to more traditional, top-down approaches, Toyota assemblers succeed not by preparing detailed design drawings of components and subsystems for their suppliers but by deﬁning only a product's key modules in rough design blueprints and specifying broad performance parameters, such as weight and size. Toyota’s suppliers take collective responsibility for the detailed design of components and subsystems. Since they are free to improvise within broad limits, they have rapidly cut their costs and improved the quality of their products.” - John Hagel and John Seely Brown, Connecting Globalization & Innovation

A new view of the customer

Increased focus on partners Partners Users Visitors

What do they want? High quality and unique content Reliable and easy-to-use tools Ways to make money Ways to get distribution Conﬁdence that they matter as customers

Partners show success and become evangelists Ecosystem gets Partners ﬁnd ways stronger and more to take advantage attractive for of the platform partners

500+ Twitter Apps

Examples: Open Out and Open In Content User engagement Applications and tools Revenue streams

Opening Out

Open Out: RSS

Open Out: Social Networks

Open Out: Applications

Open Out: Tools

Give partners access to your data mysite.com startup.com newapp.com Publisher Platform

Opening In

Open In: Users

Open In: User Behaviors “One of the key lessons of the Web 2.0 era is this: Users add value. But only a small percentage of users will go to the trouble of adding value to your application via explicit means. Therefore, Web 2.0 companies set inclusive defaults for aggregating user data and building value as a side-effect of ordinary use of the application… They build systems that get better the more people use them. ” Tim O’Reilly, “What is Web 2.0?”, September 2005

Open In: Applications

http://www.slideshare.net/fedecarg/open-platforms-and-apis

Business Beneﬁts

Common view of the beneﬁts Drive trafﬁc back to your web site Innovate faster = cost savings Improve reach Extend advertising and licensing models

Direct revenue

• Advertisers use the ad networks to maximize reach • …but targeting is increasing in priority

Encouraging use

The scary stuff How do I prevent misrepresentations of the brand and our content? Can we turn it off? Who is using our stuff?

Create the conditions for growth Access Redistribution Reuse Absence of Technological Restriction Attribution Integrity No Discrimination Against Fields of Endeavor Distribution of License License Must Not Be Speciﬁc to a Package License Must Not Restrict the Distribution of Other Works

“You may attach advertising to your web site which includes Guardian content without accounting to us for any share in the revenue generated.”

Conclusion

The Network is the Computer The network effect is a characteristic that causes a good or service to have a value to a potential customer dependent on the number of customers already owning that good or using that service. For example, by purchasing a telephone a person makes other telephones more useful. http://en.wikipedia.org/wiki/Network_effects

“When all that is solid is melting into air it’s important that we try to imagine how we’d like the future to turn out and set our sights on that, and not just struggle to keep the past alive for a few more years.” Steven Berlin Johnson, “Old Growth Media and the Future of News”

Ecosystems can ﬂatten markets quot;The average export price of Chinese [motorcycles] has dropped from $700 in the late 1990's to under $200 in 2002. The impact on rivals has been brutal: Honda's share of Vietnam's motorcycle market, for instance, dropped from nearly 90 percent in 1997 to 30 percent in 2002.“

Thank you. Matt McAlister matt.mcalister@guardian.co.uk

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The Open Strategy

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