Time for 2009 Predictions

Photo by dee gee on Flickr used under Creative Commons

Now that the 2008 recap is in the can, it’s time for 2009 predictions.

Everybody loves predictions because it’s either a chance to crow about how prescient you are or make excuses about how you were partially right and would have been totally right if it weren’t for those darn kids and their dog.

Predictions are fun because they add a time element to your opinions. I made a few last year, so let’s review:

1. Twitter will take off, then crash and burn
2. Videoblogging will make me care less
3. TV on the Interwebs will create awesomeness

This is a mixed bag of fail and win.

The first one was pretty much wrong. Twitter did take off and did crash (a few times), but didn’t burn. It’s actually been pretty reliable in the second half of 2008. The demise of Pownce, the lackluster performance of Twitter clones (Jaiku, Plurk, Identi.ca), the rise of enterprise micro-blogging (Yammer, OraTweet) and Facebook’s failed attempt to buy Twitter have further secured Twitter’s place.

The second one is wordsmithed such that I can’t be wrong, since it’s my opinion. It’s safe to say that videoblogging didn’t take off in 2008, remaining on the margins. I include video commenting, from companies like Seesmic, in that whole underwhelming bin.

The final one again has wording to keep me from being wrong, since awesome is the eye of the beholder. However, as sites like Hulu become more popular, watching TV on your computer will become the mainstream thing to do for a number of reasons:

• There are fewer ads, e.g. an hour-long program only has about 40 minutes of actual show. The other 20 minutes are commercials when you watch on TV. Watch the same show on Hulu or the network’s web site, and you’ll only see a minute or so of ads. Major win.
• As with DVRs, you can pause online TV, but unlike DVRs, you’re not constrained by your TV’s resolution. Unless you have a superior TV, HD on your computer monitor will look just as good, if not better, than it does on your TV.
• Unlike your TV, your computer does other stuff. So, if you have multiple monitors, you can watch TV and multi-task in Twitter or email. Not convinced? How many times have you sat in front of the TV with your laptop?

Anyway, I didn’t do too well last year. So, this year, I’ve tried to make real predictions that are as specific as possible. That way it’ll be easy to judge correct vs. incorrect this time next year.

Twitter will finally announce its business model.
I’m seeing the revenue come from a combination of ads placed on Twitter account pages and API pay-per-use. Twitter drives the vast majority of its traffic through “web”, and each account page has a significant amount of real estate that could be used for Google ads or banners.

Selling ads is the only tried-and-true Intertubes business model, and it seems relatively easy to implement. The beauty part of this model is that you get a cut too; I see a model that ranks each user with a score (this is already done by third parties) that can be used to price the ads on the profile.

Twitter could produce a black box algorithm that prices ads, and then broker the sales of the ads, taking a cut. Everybody wins. Of course, they’ll need to monitor bogus clicks and clean up the bots, but they’re already doing some of that.

I’m not in the camp that thinks ads will ruin Twitter because I rarely look at pages on twitter.com. So, to monetize the traffic coming from their API, Twitter will implement a pay-per-use scale for API calls. The structure will be aimed at heavy usage, which in turn will help tweak the ad algorithm, and I expect API clients like Twhirl to pass on the cost to their heaviest users by way of a subscription fee.

This is a win-win too, since the myriad of Twitter clients can now monetize their users. Users will revolt and tweet less using the clients, which in turn, will shrink the number of clients, leaving only a handful. These will be very functional clients though, and I expect Twitter to buy one, likely an AIR client, and flip it for pro users using the freemium model.

Microsoft will acquire Facebook.
Microsoft has enough cash on hand to buy just about anything, including small countries. Couple that with Facebook’s sliding valuation, thanks to adverse economic conditions, and inability to monetize, and you get a shotgun wedding.

The mainstream adoption of Facebook continues, and I’m sure you noticed that a lot of people “got Facebook for Christmas”. This has to be due to holiday gatherings where the one geek in the family demonstrates how to use Facebook. Even with a burgeoning community, Facebook struggles to show value to its advertisers.

Ad spending for 2009 is circling the bowl already, so Facebook’s tenuous revenue stream will shrink to a dry creek bed next year. This won’t have any effect on usage, which will continue to soar.

So, what happens? Usage will force Facebook to throw more infrastructure at the problem, but there won’t be any more venture funding to be had. Yes, even Facebook will find the VC well has run dry in 2009.

Microsoft will step in and buy up a controlling interest, not the whole thing. Acquiring a controlling interest in Facebook will be one of many steps Microsoft takes in 2009 to polish its image vs. the Apple PR machine. Windows 7 will be launched with Facebook “installed”, i.e. an icon on the desktop that opens Facebook in IE 8, a la Mozilla Prism.

Yahoo will open source itself.
This hardly seems like a prediction anymore. Failing to find a white (or black) knight to bail it out, Yahoo will go full monty and open source all of its assets, creating the largest Open Source project yet.

Yahoo will take a page from Amazon’s book and rent out its extra capacity to support falling ad sales. Leveraging a much larger development community, Yahoo’s offerings will suck less and rule more, and the company will find unexpected revenue in business consulting services (think Zappos Insights), as it advises other companies on how opening up is a good move.

Businesses will get open. Consumers will not.
Open Source will win big in 2009 as businesses cut costs and turn to free (as in freedom) software. This will create opportunities for consulting, as these companies decide to outsource rather than take on the cost of additional employees. The increasing demand for “open” skills (e.g. Rails, PHP, Linux) will open a windfall market in training.

Consumers will not get the open message, as OpenID, OAuth and other other open web technologies lose ground to the Facebook juggernaut. Open Source software will still be perceived as freeware, written by geeks living in their parents’ basement.

Random thoughts
Finally, here are a few thoughts that don’t warrant a lot of detail:

• IE 6 will still be the top Microsoft browser by percentage in 2009, even after Windows 7 launches with IE 8 installed.
• All flavors of IE will lose market share primarily to Google Chrome, not Firefox.
• Chrome will top 10% as it becomes Dell’s de facto browser.
• Linux will take more of the the O/S market from Windows than Mac will.
• Windows 7 will be better and more expensive than expected.

What do you think? Find the comments to sound off about my predictions, or add your own to yesterday’s post.