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App.net seeks ad-free approach

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App.net seeks ad-free approach
By Benny Evangelista, August 24, 2012

App.net founder Dalton Caldwell recently crowdsourced more than $800,000 in funding from 12,000 people in 30 days to kickstart the idea of an ad-free alternative to Twitter and Facebook. Here Caldwell at Mixed Media Labs in San Francisco, Calif., Wednesday, August 22, 2012. Photo: Jason Henry, Special To The Chronicle / ONLINE_YES

Twitter and Facebook, the two giants of social networking, have stepped up efforts to generate more advertising revenue to prove to investors that they can be profitable. But what if there was an alternative, ad-free social network that relied on other revenue streams, such as charging access to app developers or becoming a for-pay service?

That's a question a fledging social network called App.net hopes to answer. “I have no idea if this is going to work, but it is something I care about passionately,” said App.net founder Dalton Caldwell, whose résumé includes starting the social music service Imeem. “I think there is a market for it.” The San Francisco startup so far has produced only an experimental, barebones form of a microblogging service that allows 256-character messages instead of the maximum 140 characters allowed on Twitter. But App.net already is attracting interest from app developers — and easily exceeded its goal to raise enough money, more than $800,000, to get the ball rolling. “As consumers, we are currently given the choice between Facebook, Twitter, or Google+,” Caldwell wrote in a July 13 blog post announcing the start of a crowdsourced fundraising campaign. “All of these services are essentially in the same business: vying for the opportunity to sell your clickstream to advertisers.” The campaign aimed to raise $500,000 in 30 days, but App.net met that goal on Aug. 11 with 38 hours to spare. More than 12,500 people paid fees starting at $50 for one year of App.net service, which included the ability to claim the same handle that they use on Twitter. App.net's launch comes at a time when Twitter has upset its own ecosystem of app developers, including many that helped popularize it. The San Francisco microblogging service, which says it is trying to better control the overall Twitter experience, has announced a series of

technical changes to its application protocol interface that could push some of those same app developers out into the cold. Caldwell believes Twitter wouldn't have to make those moves, and could be “more powerful than Facebook,” if its executives hadn't made a decision to become more of a media company relying on a Google-style ad revenue model rather than continue as a simple messaging platform that connected online services. “If you are building an advertising/media business, it would then follow that you need to own all of the screen real-estate that users see,” he wrote. “The next logical step would be to kill all third-party clients and lock down the data in the global fire hose in order to control the „content.'” His argument raised a wider debate within the tech community about whether consumer-oriented Web 2.0 companies in general have failed with a strategy of pursuing ad revenues to the detriment of consumers. Caldwell believes that strategy has led to a “monoculture” that is bad for the economic health of the online industry. “To be clear, I don't see what we're doing as necessarily the cure to all ad-supported issues,” Caldwell said in an interview. “But I see a monoculture out there. A healthy ecosystem has alternative business models in the same space.” For its part, Facebook went public in May at $38 per share. But that price has plummeted to less than $20 per share, largely on concerns that the Menlo Park, Calif., social network might not be able to boost revenue from advertising, especially with more than half its 950 million users coming to the service on mobile devices.

Analyst Richard Greenfield of BTIG Research noted that Facebook now is experimenting with advertiser-funded “sponsored stories” that are taking up larger portions of smartphone screens. “While not all Facebook mobile sponsored stories are as large as the AT&T ad we noticed, it clearly shows that Facebook is trying harder to appeal to advertisers versus a strict focus on users' experience,” Greenfield wrote in a blog post. And that, Greenfield said, contrasts with what App.net is trying to accomplish. “While the current apps are relatively simple or still in the process of being built, we sense developer excitement is driven by the knowledge that they can do anything they want with the App.net platform (unlike Facebook and Twitter),” he wrote. “Someone has already built a search function for App.net, which also shows trending hashtags.” Analyst Jeremiah Owyang of the Altimeter Group in San Mateo, Calif., bought a $50 membership in App.net as part of his job to keep track of tech trends. But he doesn't expect App.net to have enough mass-market appeal to succeed. “I do think it's innovative to have a premium social network, but I think it's only going to appeal to a small market of early adopters and those who are hyper-vigilant about their data and usage,” Owyang said. So far, “it's just a stripped-down version of Twitter and there's nothing incredibly interesting per se.”

Summary The San Francisco startup so far has produced only an experimental, barebones form of a microblogging service that allows 256-character messages instead of the maximum 140 characters allowed on Twitter.

But App.net already is attracting interest from app developers — and easily exceeded its goal to raise enough money, more than $800,000, to get the ball rolling.

Description
“As consumers, we are currently given the choice between Facebook, Twitter, or Google+,” Caldwell wrote in a July 13 blog post announcing the start of a crowdsourced fundraising campaign. “All of these services are essentially in the same business: vying for the opportunity to sell your clickstream to advertisers.”

Tags: App.net, apps, Crowdfunding, Crowdsourcing, Dalton Caldwell, Facebook, Social Media

Posted by Pablo Braccini

Aug 25, 2012 04:58 am GMT Viewed 632 times

Author: Benny Evangelista Source

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