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“ In the past few thousand years, the way we pay has changed just three times—from coins, to paper money, to plastic cards.

Now we’re on the brink of the next big shift.”

These are the exact sentences that one could face at the site of the new buzz of the mobile payment industry, Google Wallet. As it was expected, Google has announced the development and launch of a service which could radically change the way people make payments nowadays. In simple terms, Google Wallet is an application that enables any users (with the appropriate provider and smart-phone device) to pay for their purchase without having to use any credit cards or other physical means of payment. The idea itself is indeed fascinating, however it is worth some paragraphs to analyze the importance and the background of such a promising initiative.

It is about time to innovate the payment industry and Google is just at the right place to do it. They not only have the expertise and knowledge in innovative change management but also happen to possess a well-established network of resources including their main power provider, the Android devices. Mixing the unsatisfied need for innovation with cutting edge technology, Google is about to take another step towards complete “domination”. The technique of Near Field Communication (NFC) makes it possible to establish a purely mobile based payment system that could enable Google to take a significant chunk of the market share. There are two things needed for the creation of such a network within any shop environment… a POS terminal and your smart-phone! All the rest is solved through wireless communication between the two devices. As an addition, one is able to own multiple accounts within one platform as well as incorporate other services. According to…

“loyalty cards, gift cards, receipts, boarding passes, tickets, even your keys will be seamlessly synced to your Google Wallet. And every offer and loyalty point will be redeemed automatically with a single tap via NFC.”

The real value of Google Wallet is its capabilities offered to merchants! …

“For merchants, Google’s NFC is the link to a seamless marketing campaign: Lure customers with special offers and then offer a smooth transition from promotion to “e-coupon” to purchase and payment.”

Fascinating, isn’t it?! It sounds logical, simple, fast and safe.

As you might see.. the above question is indeed ironic to a certain extent. Before jumping to premature conclusions let us have a look at the dark side of the story. At this point, one might wonder.. if NFC is such a highly demanded tool for innovation, how come it did not break in the market before? One of the main reasons for the modest success of the technology lies within the principles of basic consumer behavior. Consumers like to see things, touch things, feel things…etc .. consequently, not having a physical representation of their credit cards or their purchase could easily make them unsecure about the whole process. Not having anything tangible could and indeed will cause misperception. Whereas ‘plastic’ is well-known and universally understood, ‘thin air style’ payments are not. Due to this phenomenon, consumers seem to have little intention to change their purchasing habits and shift to payments through a contactless device. This can be identified as one of the big threats for Google and the success of its newly released  Wallet feature. Even though Google has recently announced that its Mobile Advertising Services (AdMob) is receiving 3,5 times as many requests as it did a year ago there are still some serious issues to take into consideration when forecasting the future success of the approach.

And it does seem to work! :

Google not only would have to face to increasing number of competitors on the market (Isis, a contactless payment alliance established by AT&T, T-Mobile, and Verizon not long before the launch of Google Wallet was published) but also has to tackle acquisitions and speculation assessing the major weaknesses of the product. The biggest drawback of the product could be the issue of security. Until know, Google could not certify its users that they are protected from such issues as ‘stolen or misplaced devices’. Their sole solution to the problem is to ‘cancel the users cards’ however that advice alone will not contribute to the popularity of their product. Apart from this major issue there are other questions to be answered :

What will happen to the existing payment system, network of old machinery and cards?

Can Google make advantage of its ’Android standard’ and obligate Android users to change their systems to the Google Wallet platform ?

And if so, would it raise the ever concerning issue of Google over-dominance?!

To conclude, this initiative could be one of the most lucrative investments int he field of payments. The fact that PayPal recently sued Google for idea theft – accusing them of stealing trade secrets and poaching employees – is just an other proof of extreme importance. No matter who is going to triumph in this war.. whoever does it will be able to create and own an open commerce ecosystem.. and that, my friends.. is ultimate power!

Predicting the future is not an easy thing. In fact, it is impossible to have precise forecasts about things and events that are going to happen in a given industry. In spite of this universal wisdom, there are certain topics and issues that are worth to talk, speculate about. One of these burning issues is the battle between Google and Facebook. The cold war between the two giants has recently turned into a ‘hot war’ triggered by the rumors of Facebook’s disgraceful act of trying to create a general scandal about Google’s practice of information gathering and usage without the consent of its customers.

As we all know the two giants have earned their revenues in completely different fields, Facebook owns a “monopoly” of social networking whereas Google is about the dominate the world of online advertising by taking advantage of its 3 pillar strategy that involves contextual and display advertising along with the most popular video content provider, Youtube. Until recently, the competition between the two could have been considered calm and predictable, however as both giants reach the limits of their current capabilities, it is time to look for a new adventure. This new adventure is called ‘the social graph’. The social graph is claimed to be one of the most valuable data sets in existence. In simple terms, it is a map that incorporates the connection between you as a user and all others that you interact with. Facebook has it.. Google has some part of it and wants more. Here is the underlying motive for the war that is predicted to be the biggest one in internet history.

It is needless to say that the real value behind the social graph is the ability to access and make advantage of the personalized information about millions of internet-users. By being part of a social network people literally provide Facebook with all the data it needs to build the strongest value proposition for its predicted social search engine. If facebook will ever going to be able to build its own search engine, the gathering of the troops of advertisers is only a split-second away. By having a search engine on its social interface which is able to identify users according to their preferences, habits, customs..etc ; Facebook would have a clear competitive advantage over Google. Moreover, if Facebook could find external sites to accommodate its offerings, not only the pillar of contextual advertising would be in danger, but also the second bastion of display advertising. This in return could place Google in a rather difficult situation.

The Facebook search engine would work like this

“Search results, including sponsored links and algorithmic search results, are generated in response to a query, and are marked based on frequency of clicks on the search results by members of social network who are within a predetermined degree of separation from the member who submitted the query. The markers are visual tags and comprise either a text string or an image. – Facebook patent for search”

In spite of all these speculation, the ex-CEO of Google Eric Schmidt still doesn’t believe that Facebook is the real threat for Google. According to him

“Facebook’s ads business does not displace our advertising. I’m somewhat perplexed by the obsession, because I don’t think the facts support it Microsoft has more cash, more engineers, more global reach. We see competition from Microsoft every day.”

On the other side of the game, Facebook clearly considers Google as their biggest threat for the future. Rob Enderle, an analyst from the Enderle Group stated

“Google is clearly gearing up for a run at social networking…. If anybody could put Facebook out of business at this point, it would be Google. A head-to-head competition between the two companies would probably end up with Google winning and Facebook gone” he stated.

To intensify the problems of Google, there has been recent developments about the cooperation between Microsoft and Facebook. The two companies are working together to make internet search more social. If this proves to be successful, Google might start thinking of an effective counter-attack. According to the newly elected Google CEO, Larry Page Facebook could indeed be the biggest threat for Google, however there is not much happening with Google and social networking. As a matter of fact, there are constant rumors about the possible launch of a Google Social Network called ‘Google Me’. Google Me would incorporate all the G-products in one bundle allowing the users to exchange mails via Gmail, share photos via Picasa, chat via G-talk, share video content via Youtube …and so on. The major problem with this idea is the actual assumption that people would be willing to leave their already established ‘Facebook-lives’ and change to become a ‘Google Me’ user. It is common knowledge that people don’t like changes in general. If we consider the network effect of Facebook, it is very unlikely that this particular project of Google will be successful, unless they come up with an idea that would revolutionize the Social Networking Sphere.

In conclusion, the long-term goal of Facebook (as well as the major threat for Google) is to establish its search engine that could later be extended to global web search. Once they achieved global web search, it is going to be relatively easy to do global advertising. As of today, the undisputed leader products of contextual advertising are Adwords and Adsense by Google, however when businesses realize that their advertising could be better targeted and personalized through social network capabilities, they could easily shift their advertising budgets to the benefit of Facebook. Even if Google tried to create a social networking site, the job would be extremely difficult because the situation would look just like the one in the search engine market. Bing tries to compete Google but the competition is too strong. There is a fear, that Facebook has grown too strong in the area of social networking already. No matter what, the competition will prevail and intensify in order to reach the ultimate goal of every internet company : To be the point of entry for users of the Internet. Whoever controls the gateway (the first page) will ultimately deliver the most effective advertising solutions.

This ‘clash of the titans is not necessarily bad. On the contrary, it is probably very beneficial for the internet society as there are still huge opportunities for improvement and growth both at Google, Facebook or the whole internet ecosystem. Although we can not predict the future, there is one thing for sure… The winner of this clash will not be announced for many more years.

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If we have a look at the gaming business nowadays, it is more and more obvious that in the very near future, there is going to be a major shift in trends within the industry. Gaming in the form of personal entertainment at home devices such as PC-s or Consoles have been present for several years, however with the extreme pace of technological innovation on the internet, there is a whole new universe of possible alternatives for such activities. This universe is called online gaming. In order to understand the reasons behind its recent rise, we need to know why wasn’t it possible for the messes to engage themselves with online gaming before.. ? The most general reason is that until recently, the availability of powerful online connection was very limited, this is why most online games (that by the way required extensive speed of connection as well as powerful supporting devices) were not able to attain the required amount of people, hence creating an audience, a critical mass to create a gaming community. Due to the low speed of connectivity and the lack of resources possessed by the user, gamers often faced situations where the games in which they were “just about the fight the final opponent” simply lost the connection for a certain time which was just enough to lose the epic end battle or finish second in a race. The fact that many gamers lost their motivation to play after such events is quite understandable. Who would want to engage himself in online games where reaching the long desired final point was impossible due to connectivity reasons.

Despite all the failures of the system, the online gaming communities grew over time and gained popularity within the gamer society. One good example for such a group is the online community of the World of Warcraft where people literally play hours every single day. If we analyze the pros and cons of online gaming it is easy to conclude that the advantages outweigh the disadvantages. Although connection problems occur, online gaming is indeed addictive. Several studies were conducted in the matter, trying to identify behavioral patterns and habits of hardcore online gamers. As a matter of fact, there is a significant psychological need behind the urge to play online and to be part of an online gaming community. Games as they are, provides short term successes to the player whereas this might not be the case in the person’s real life. These virtual platforms allow people to take any role they feel comfortable with and gain valuable “experience of success, recognition and sometimes even fame”. This motive is one of the basic routes of the desperation of an online gamer.

Another equally important development in the online gaming field is that, whereas some years ago, online games were mostly available in C2M (Customer to Machine) form, (in which the actions of the opponent were mostly based on AI and predetermined computer processes) nowadays the most common form of online gaming includes the platform of C2C communication. In this case, the gamer plays against a real opponent with real ‘unpredictable’ actions involved. Evidently, this type of gameplay is way more interesting for the players than the regular ‘against the computer’ setups. Not only ‘player against player’ platforms offer real victories over the other, but it also has the capabilities of ex-post activities such as experience sharing, knowledge sharing, after game discussions and re-match arrangements. This way, the whole world of online gaming became more and more interactive over time. Of course, such tempting features don’t come for free. In order to be part of such an online community one has to pay a fee. This fee constitutes to the main revenue stream of the hosting companies as of today. (And I say as of today on purpose because the there could be a whole new set of revenue drivers initiated in the near future. Read the full post to fully understand the story) As an additional feature, nowadays it is even possible to share the results of an actual game on different social networks such as Facebook or Twitter. This phenomenon not only helps the customer increase his/her ‘gamer reputation’ but also serves as a great advertising tool for the game itself or for the website that hosts that particular game. Realizing the potential in the online gaming industry, social networks such as Facebook swiftly started to develop and publicize their own online games on the own network. Since these networks have all the capabilities to advertise one game or another, it was evident that sooner or later a whole new concept of gaming will come to existence.

This concept is called ‘social gaming’. Social gaming is the simple adaptation of online games into social platforms such as Facebook. One of the many popular games over facebook is Farmville. This is the point where I would like to point out the enormous potential in the social gaming industry. Such social games are not only attractive and entertaining, but as opposed to the regular online gaming communities that require membership fees, these games are free of charge. In addition, since they are hosted by a social website, the community and all its capabilities are given by default. To sum it up, these games are addictive, attractive, free of charge and include the so called ‘social network effect’ too. The social network effect is the phenomenon when one sees his/her peer’s results on his wall and being triggered by this information, he/she also starts to play the game. (“If he likes it, I will try it too.. must be fun”) If we consider these attributes and have a decent opinion about the future improvement of the internet (in terms of social networking capabilities as well as e-gaming characteristics) it shouldn’t take much brainstorming to realize that this evolving industry have incredible marketing/advertising opportunities to be explored and make use of. One of the early pioneers of these approaches was Microsoft when it successfully launched an initiative in which all Farmville players were granted money in case they liked their search engine’s (BING) facebook page. As a result of this campaign, Bing gained 400.000 likes in ONE DAY!

This was just one illustrative example that shows how powerful social gaming could become in the very near future. According to eMarketer, social gaming is about to have 68,7 million users engaged by the end of 2012. This number also shows how sweet the pot can become for certain advertisers that are not afraid to take the first step and become early adapters. To visualize the above mentioned issues, let here be a video about the evolution of social gaming. Meanwhile watching, let us think about the peer to peer and advertising implications of these tools

Some very big industry firms such as Disney, Google or EA already started to build their base of social gaming by acquiring the largest firms of the social gaming industry. This area could just be another battlefield for the above mentioned giants. To conclude, all signs indicate that the next big thing is going to be happening in the social gaming sphere. If advertisers are able to use the games’ ‘attractiveness and addictiveness’ along with the pre-established install based of social networks the whole picture of the online advertising setup could change. The only question to be answered stays for the end of the debate : Are people going to be happy to see all the advertisements in their leisure ‘game-time’ ? Arent they going to get upset by the intrusive nature of the in-game ads ? Maybe a possible solution for these concerns could be the offering of a freemium version for every game, where the consumer is able to decide whether he would like to play the game for free (with ads) or pay a small amount and avoid the unwanted in-game ads. This is up to the player’s consideration and I am curious to see what the future will bring…

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Has anyone ever think about the amount of information being exchanged on social media sites day by day? Do we (users) have any idea about the multitude and frequency of these transactions? What if you could monetize it… ?

As Peter Drucker debated: “ We can say with certainty – or 90% probability – that the new industries that are about to be born will have nothing to do with information. “ As a matter of fact, Mr. Drucker might have been wrong on this. This is a question for further debate, however there is one universal truth. Information is not only available but also extremely valuable for various different players of the business world. By knowing how valuable information can become to advertisers, the question might arise : Why don’t prosumers take advantage of it? As I mentioned in my previous post, the evolution of the regular consumer turned into a phase where one is able to interact with others with several tools that are provided by the social network sites (posts,photos,videos..etc) This way there is a more and more widespread tendency to act as prosumers / influencers in an online community. These influencers have the unique ability to be the center of a given forum or discussion.

Once they achieved this stage (thanks to their unique capability to gather the masses behind a common purpose) there is a huge opportunity for advancement. It is also common knowledge that one of the basic ‘action-words’ of successful advertising is ‘location-location-location’. Taking into consideration that these social influencers are capable of gathering a good sum of people on a common location, their ability to influence is indeed valuable. Now that we understand the mechanics of the process, one might wonder.. Why are these influencers doing these activities for free ? As a matter of fact, since each and every group member contributes to the development of the discussion to a certain extent, their contributions should also be considered as valuable pieces of information. If we continue along this line of thought, all the information that is being exchanged on social sites such as Facebook or Twitter has a value. Once it is clear that everything that we share, tweet or post has a given value to another person within the community, the question may be asked : Why don’t we take advantage of it ? Consequently.. Should we take advantage of it ? Although Facebook is a free service, users are overwhelmed with the flow of unwanted information coming through in the form of spams, non-desired applications or advertisements.. What if these features could be eliminated? What if there was a social website with the capabilities to block all these unwanted social elements in exchange for a new revenue making model.

MyCube have developed a social site in which users don’t have to deal with the issues mentioned above. According to the founder of MyCube, Staël von Holstein “MyCube will be the liberation forces poised to overthrow Zuckerberg’s autocracy” The reason he says it is because Facebook does not allow users to have more than 5000 friends as well as it restricts the addressing of more than 20 people at a time. This, by itself would not be a problem, since as discussed before, people don’t like to be bothered.. However, if the information that one user possesses proves to be valuable, he/she should have the capabilities to share it with a wider range of people. The main idea behind MyCube is the creation of a social exchange community where users could take full control of their data and privacy control. This way MyCube guarantees the transparency of information among the different channels of the site. As a matter of fact, on this site, users should look at the data they create as a representation of value, a piece of information which (in case it is proved to be valuable for others) could be traded within the community. If one signs up for MyCube he immediately receives 5000 free “Cubes” a virtual currency on the site that has a total worth of 40 dollars. The whole idea behind the structure was based on the creation of a so-called ‘system of nanopayments’ that were about to be implemented between users online, on a daily basis.

On MyCube, one is able to charge for the access of the content that is being created. The sort of contents can include videos, posts, articles, pictures and so on… These contents can be charged for whatever amount the user decides however usually they are charged for as much as 1 cent. This is important because information on the internet in general does not worth more than cents. Once the user is able to gather the desired audience and establish a regular follower base, he/she can start charging visitors for specified content. Since we would not necessarily want to charge our friends for the content we create, the MyCube user could also opt for featured advertising in specific areas of the site. This way, a fine balance could be established between paying group members and friends with free access to the content. Summarizing the above mentioned attributes, for some people MyCube would act as a social network without ads, for some others it would serve as a tool for social commerce and trade. Staël von Holstein calls this a ‘Digital Life Management’ tool as well as a’The first social exchange site’ … Regarding the financial transactions of the site.. 70% of the sum would go to the content generation, meanwhile the rest of the sum would benefit MyCube.

After understanding the characteristics of this new social network idea, it is time to debate whether it has the chance to compete with the so far unchallenged facebook model..? Will the value proposition be enough to not only trigger consumer interest but also make them take the action of opening and account on . In my opinion, the idea is great in itself and information indeed is valuable. The idea of sharing information and personal content for a nominal price however might create some ambiguity in the social communities. One can wonder whether it is ethical to change the whole method of information sharing online.. Since this is a whole new business idea that incorporates so far unprecedented approaches, the digital world is curious to see whether it is going to be able to step from the ‘awareness’ stage to the actual try-outs..


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Social media once used primarily for sharing photos and exchanging different updates with friends has turned into a whole new world where people share and express ideas about the issues of the world as well as gather in ‘common-interest’ groups to get daily updates along a new flow of information. Nowadays social media is not only used for self-representation purposes in the form of  ‘status updates’ or ‘tweets’,but also became a alternative for second lives. By using the never ending variety of social media tools, one is able to create an online environment where anything is possible. Evidently, the general purpose of social media sites is to provide people with the possibility to create content, to connect with each other and to share values. In this sense, social media is not only a new type of activity online, it is a lifestyle, a permanent occupation as well as a social burden. In other words, if you dont have a profile on one of the social media websites of the modern society, YOU DONT EXIST! At this point one can debate whether the existence of social media benefits the society as a whole or not, however I believe that its each and every individual’s personal dilemma to think about.

Given the fact that social media websites are one of the most popular creations of the digital era it is inevitable that sooner or later people would start using it for purposes that it might not be meant for. Being aware of such a site’s advantages – such as global reach, anonymity, cheap advertising tools and solutions…etc – does not necessarily mean that these attributes will have to be used for unethical purposes. Due to the evolution of the classical consumer to the new era prosumer, online activity nowadays is characterized by a niche culture where people are gathering information, sharing ideas, listening to and giving recommendations, formulating opinions and last but not least INFLUENCING others. Influence is a great inborn gift, however if not used carefully it can result in the generation of horrendous movements and ideas. One can debate here whether the freedom of speech or opinion should be restricted in these cases or not. But where is the limit and who is going to define those boundaries between ethical / acceptable behavior and unethical / unacceptable behavior ? This is the million dollar question, and there are continuous debates all over the net about the issue.

What is truly concerning is that in certain times of revolutionary waves (such as the one recently in the Arab world) there is no clear cut distinction between ‘opinion sharing’ and ‘encouragement for radical acts’ . . . Each and every social media site is different in terms of regulation and they all function according to the same principle of freedom of opinion and speech. If we look back to the basics, a new business’ purpose would be to create value. Create value in a way that noone else can do. This would then constitute to the fundamentals of its competitive advantage. However, the question arises.. Will the lenient behavior of social media sites contribute to the creation of value ? Will it be able to justify its principles even when certain parties use their sites to gather a good sum of people with a common purpose of radical activity ? And if not, then is the ever-innovative digital industry supposed to take a step back and set the rules of the game right ?

I believe that this topic is worth to be debated because of the major influence it can have on our society in the future. We have reached a bottleneck where social media is not only used for fun anymore. According to “Facebook and other social networks are now wrestling as their platforms have become powerful communication and organizing tools by advocates, especially in countries with limits on freedom of expression. Facebook and other companies, trying to maintain a neutral position, have been relying on their existing terms of service to manage the conflicts that arise.”

Of course the possible solutions for this issue would include the reorganization of in-site regulations and laws as well as the strict legislation in case of breach. Once the users are aware of the grave consequences of their social actions (hence understanding that their anonymity is lost and they are responsible for what they preach) they might be reluctant to use social media sites for certain activities that encourage and support radical approaches. In my belief, since many of these provocateurs are highly dependent on their social media life, a threat to the existence of their online presence (profile) should and could be enough to stop them from the radicalization of the web. Nevertheless it can only be considered as a short term, rapid solution for the upcoming problems. In the long term, undoubtedly, the re-establishment of social media ground rules are needed. The creation of these initiatives however primarily depend on the site owners and administrators and as of today they did not seem to be devoted to the rapid solution of the issue.

This is why the ultimate question stays unanswered : How long before we realize that immediate action is needed to preserve the value and purpose of social media ? . . .

Masters candidate at IE Business School, Madrid

(Masters of International Management with the specialization of Digital Business)

I am passionate about the digital world and the different powers of influence that affect the digital business environment. In this blog, posts about recent news, discussions, topics, thoughts  about the digital world and its convergence are going to be published and opened for further consideration.

For further information about the author please visit my Linkedin profile or get in contact at / at @David.Koves