Russian dolls the mother of all web
(First published in Global Corporate Venturing, October 2010). R
ussian dolls, Babushka to you, are those nested wooden painted dolls where a larger doll hides a smaller doll, and so on. The Google investment in Zynga made me think of them. Zynga of course is the publisher of Farmville a social game which has become so powerful that the parent company is rumoured to have raised $500M in venture money, of which Google is said to have contributed some $150M in the latest round. One reason for their investment, which is anyway an interesting example of the recent revival of corporate venturing, might be that games are good products for pay per use, and maybe also fertile ground for advertising. Google of course has a huge business in advertising and recently seems to have ambitions in micropayments too.
But the increasing dominance of Facebook poses a sort of “Facebook vz ROW” (R(est) O(f) W(eb)” challenge).
To see how serious this is already, let
me give you some parochial examples: wandering on Sunday morning along the Thames river in Barnes and Putney today I saw an advertisement for a major new film release promoted on the road-side poster not by a reference to a web site but to a facebook tab (a f-URL?). And then as I passed a pub, their road-side chalkboard invited regulars not to view their web site, but to ‘friend’ them.
“One key strategy for any company with a web presence has been to have a Facebook presence too.”
One key strategy for any company with a web presence has been to have a Facebook presence too. But these two advertisers, a major film studio and my ‘local’, appear to think a Facebook f-URL is enough. Facebook’s attempt to engage with exiting web content from within Facebook via the iLike programme, drawing web sites into its navigational (and ad serving and micropayment) platform appears to be working well for them. So how does Google prevent itself from fitting into the Facebook Mother resulting in potentially lost revenue via its own web platform for discovery and monetization? Well, how about by investing in
34 entrepreneurcountry
a smaller doll and fitting neatly inside Facebook? Of course Zynga’s Farmville is now so popular that it would be hard indeed to boot it out. And who will handle the ad inventory generated in Zynga games let alone any potential pay per play revenues?
Consider this from two economic perspectives: that of the advertiser, arguably the ‘real’ customer here; and then that of the user.
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