Jan 18, 2008
And if you think my title was pure attention-grabbing stunt then let’s first define what widget really means. As per Wikipedia –
In computer programming, a widget (or control) is an interface element that a computer user interacts with, such as a window or a text box. Widgets are sometimes qualified as virtual to distinguish them from their physical counterparts, e.g. virtual buttons that can be clicked with a mouse cursor, vs. physical buttons that can be pressed with a finger. Widgets are often packaged together in widget toolkits. Programmers use widgets to build graphical user interfaces (GUIs)
Google AdWords is the most widely used widget out there. It shows highly targeted text-ads right next to the content. Publisher’s motivation is to make money via Adsense and advertiser’s motivation in reaching out to highly targeted audience.
Google has stitched together a brilliant relationship between search relevance and AdWords-driven ad targeting.
INFORMATION SEARCH = INFORMATION WIDGET (AD)
Now lets talk about social networking space. Where search experience is replaced by SOCIAL EXPERIENCE. Experience is the main motivation for users to go to Faceook and Myspace. Dating, catching up with friends, discovering new people are all part of that experience.
How can companies tap into this experience network? Enter experience widgets. Slide, Rockyou and many others provide this experience widgets. They allow users to share photos, videos and all sorts of creative mixing. At the end of the day they are widgets which taps into the new currency called social experience.
SOCIAL EXPERIENCE = EXPERIENCE WIDGET (AD)
So companies providing these experience widget will be competitively valued vis-a-vis Google. No? I am not sure myself but I think that’s what is going on in the minds of Slide investors. Obviously people are surprised at the valuation.
Adam cites $1.40 for each installed application user. Which provides one way to analyze this number.
Key is in figuring out the right metric to justify the valuation. One way is to tie-in with Facebook valuation, other is to tie-in with Google search revenue. So there are many ways to PLAY this market.
My guess is all companies have somehow tied their projections to Google’s search revenue. If Google can do X using Y then in new social-graph driven era we can do 10% of X using 10% of Y.
Do you think that’s what Slide did with this funding announcement?