Two days ago a co-worker came to me and asked me for advice on how to use Facebook as a recruiting tool. While he had already begun utilizing it, he wanted some advice on ways to more efficiently search through people. In the course of discussion he asked me how to recruit more people like myself, given that I fall within the demographic that they are targeting for employment. I quickly explained to him that through the utilization of blogs and social networks we could attract more qualified individuals. After providing some additional feedback I left and said I would get back to him with any other ideas that I came up with.

Since then I have been thinking more about what would help recruit top notch candidates for employment. I came to the conclusion that transparency is critical. While I’ve read about the necessity of transparency in books like “Naked Conversations,” I had never realized the true impact, until today. How can companies attract new graduates that have spent their college careers on social networks, being granted practically unfiltered access to all of their friends social interactions through a story of pictures and other public statements? Well, there is no option but to become equally transparent.

I concluded that the best way to attract the “generation me” crowd that will soon contribute to the creative class in society, is to break down all barriers and grant them access to see the people that make up a company. I suggested that all of my co-workers on the digital team should be on Facebook with our profiles filled and have at least a few pictures. People connect with people, not with companies. If your company can illustrate that it is composed of fun, intelligent and creative individuals, I am willing to bet that there is a greater chance of attracting the people that you want to hire.

Prior to the internet, it was much more difficult for job seekers to view the people that made up a company. Instead, they went to those companies that had a solid reputation. Times have changed and companies need to open up. There is a revolution taking place that we are slowly beginning to see the impact of. The world has become more transparent, and as a result companies will need to become transparent as well if they intent to recruit the younger generation.

We hear it all the time: if you create a business, make sure you pick a good niche. While I typically heed such advice, I occasionally go astray. This blog is one example of going astray. While I may write interesting content, I hop from covering issues about blogging, to issues about social media, entrepreneurship, and technology news. Bottom line, I am covering a lot of bases. When I launched my new blog, AllFacebook last Friday I quickly realized the benefit of focusing on a niche. By Sunday, I was receiving over 450 unique visitors to the site. For this blog, getting that number of daily visitors took months, and frequently I don’t come close. I have started and been part of many start-up companies. Being part of these companies gave me the opportunity to see the result of picking good and picking bad niches. While focusing on a niche doesn’t necessarily guarantee success, it definitely helps. Once you find the right niche, you will quickly know because customers (or blog visitors) will start checking out your product immediately. Unfulfilled niches are a great market to serve, but also can be challenging to uncover.

One of my better investments that I made was in a site, WoodenModelShips.com. This site focuses strictly on selling wooden model ships. When you are talking about niche, this is the epitome of niche. There is also a fine balance of picking the right sized niche. If you get too niche (e.g. all the people living on your block), you are going to cut off much of your potential revenue. At some point you are going to have to either expand your niche or go create a new business to satisfy yet another target market.

So what are a few good ways of picking the proper niche? Well, start thinking about the groups that you are involved with on a daily basis. Are you part of a church or synagogue? Are you active in your neighborhood? Do you work out at a gym? What hobbies do you have? All these questions are a good place to start. One good example is local technology enthusiasts. I had the good fortune of catering to this group with the Tech Cocktail event that I co-hosted with Frank Gruber and Eric Olson. I’m interested in hearing about your niche experiences. How does your company find niches and what niches do they serve?

Social shopping is something that e-commerce companies (Amazon, eBay, etc) have been trying to perfect since the birth of e-commerce. Years ago, a couple of friends and I were sitting around questioning how can social networks (at the time Friendster) monetize their users effectively? As of now large social networks (Facebook, MySpace, Friendster, Orkut, Hi5, etc) have generated revenue through banner ads. This model is nowhere near the potential they have for generating revenue from their visitors. As of now, Amazon is the best example of effectively monetizing their user base through social interactions. Via user generated content, Amazon has been able to get users to buy more. Providing an open forum to discuss products has proven to be an effective model. So why haven’t the main social networks implemented such features? As Alex Iskold suggests, Facebook is about to.

Imagine getting updates that your friend just finished a great book, or is listening to a great song, or that they just bought the hottest new pair of jeans. A large portion of purchases that people make are based on recommendations. If you had a constant stream of what products your friends, family, and acquaintances were purchasing, presented in an effective manner, chances are at some point you will make a purchase. This is what Facebook is hoping to do and I have a feeling that they may be the first to effectively execute it. I’ve heard of bloggers that make hundreds of thousands of dollars from effectively monetizing their blog with affiliate programs. Imagine what will happen when Facebook becomes an affiliate for large e-tailers. The only thing to note here is that this will need to be launched gradually. Remember the backlash that the Facebook community had when Facebook introduced their news streams? I’m guessing Facebook would suffer a larger backlash once they become commercial.

Regardless, effective social networking monetization is coming. I think Facebook is going to be the first to do it. As of now most social networks have been focused on what free features they can add that will make users spend more time on their site. Now they are going to start figuring out features that will make users buy more on their site.

Let’s go burn $100 million. According to Read Write Web that’s what Ask.com is planning on doing this summer. “Our business plan is to take a chunk of Google’s market share!” While this isn’t a direct quote, be wary of anyone that says anything resembling such a statement. If ask is intending to take any chunk out of Google’s pocket they better provide a service that is exponentially better or not in direct competition of Google. While Ask.com has been able to obtain over 1% of the search market, they have been having serious difficulties trying to expand their market share. If you were a large investor with hundreds of millions of dollars to invest, would you be betting on a Google competitor or would you look for alternative businesses that have less dominant competitors? Pretty simple answer there.

Rather than investing in R&D, Ask.com is practically throwing $100 million out the window at a one time marketing blitz. While such a blitz may temporarily drive a marginal amount of traffic (in relative terms) in their direction, it most likely won’t have much of an impact at all. Additionally, if you are going to invest that much money in driving people to your site, you should make sure that your search results are good. From my experience their results are much worse compared to Google (although all of my tests have been self-interested queries). How about Ask.com buys out Facebook for 8 billion dollars? Wait they don’t have 8 billion dollars. Well, while I don’t have a solution for Ask.com, but Josh Catone has a few suggestions including:

• Creating transparency within a their upcoming publisher network that will compete with Google’s Adsense - This is a great point. Currently Google doesn’t let publishers know how much they are sharing on a per click basis. The only problem with this idea though is Google could simply choose to increase their transparency to knock any potential competitors out of the market.
• Stop click fraud - This is going to be a difficult one. Considering Google’s click fraud costs them over $1 billion a year I’d be willing to bet they are investing a significant amount on stopping it.
• Get top publishers - If you control the top publishers than you will attract top advertisers. Nothing new here. The only problem though is companies like Google, Microsoft, and Yahoo have much greater leverage than Ask.com. They will have to offer some serious advantages to make their position convincing to any top publisher.

I hate to be pessimistic, but Ask.com is going to have to come up with a better business plan than the existing one. Trying to compete head on with the industry giants is not a great strategy. Best of luck to Ask, but in my own opinion they are tossing their money down the tube.

Starting up a business with the idea of tricking the tv industry is a formidable plan to say the least. That’s exactly what Joost is aiming to do. Joost, which is currently in beta, is aiming to bring full-screen streaming television to your personal computer. As of now, many television companies are providing high quality downloads of their shows via Itunes, as well as providing streaming versions of their shows in lower quality via their websites. With all the hype surrounding Joost I was fairly skeptical. To be honest I still am. Joost is furiously signing agreements with major media companies including MTV, Comedy Central, National Geographic, Sports Illustrated, CNN, and others. What I’m really trying to grasp is why on earth these companies are signing agreements with Joost. Well I’ve concluded that the answer is quite simple.

Niklas Zennstrom and Janus Friis are about to successfully pull off one of the biggest fear driven deals in history. After successfully launching and selling one of the world’s largest peer to peer networks, Kazaa, Zennstrom and Friis are sparking fear throughout the television industry. The television industry has witnessed the music industry suffer a catastrophic downfall in their sales and they don’t want to be next. Unfortunately, early warning signs suggest they may be next. As a result, many mainstream video content providers are rushing to sign deals with the up and coming Joost. The big guys aren’t the only ones signing on and that is part of the reason that they are scared. On Monday, Joost announced a partnership with Heavy.com to provide content for three channels on Joost. What I find to be phenomenal though is how the large media companies have been practically tricked in to signing agreements.

Would Joost be able to survive solely on user-generated video? I doubt it. They need real content if they are going to truly become the internet based television. Given that YouTube is currently the largest source of user-generated video and there is no way they will sign a deal with Joost, what edge does Joost truly have when it comes down to it? Fear. That is all I can conclude. By creating a magnificent amount of buzz surrounding their pre-beta release, and now beta-release they appear as a threatening entity to the television industry. Honestly I think it is all hype. Why would mainstream media want to give someone else a cut of the pie when they could go develop the technology themself? If Joost keeps the hype going and can successfully snatch up agreements with a few other critical partners they may just succeed, but their success is truly reliant upon the remaining partners. Without the overwhelming support of a currently threatened industry, their odds for success are pretty low. Ultimately we will have to wait and see what happens, but my opinion is Joost is frantically trying to acquire partners before it’s too late. If they can get enough partners while all the buzz is going on then they might have a shot, otherwise I see a bleak future ahead.

Last Friday, the New York Times published an article covering new services being provided by Amazon’s Web Services. Amazon will begin granting small business access to their massive distribution centers around the country. Having become the masters in online order fulfillment, Amazon has decided to begin providing components of their existing infrastructure for a small fee. This is an addition to their existing system that was already enabling start up web ventures to reduce the growing pains that typical internet start-ups experience. When I met the Chief Technology Officer of Amazon at the Future of Web Apps conference earlier this year in London, he was heavily promoting the S3 services.

For those that are unaware of S3 or don’t understand the efficiencies gained by using the service, let me tell you, it can be a lifesaver. For example, start-ups that are fortunate (or unfortunate) enough to experience the Techcrunch or Digg effects (getting a massive onslaught of traffic from being posted on Techcrunch or having a popular Digg article) can also have their sites crashed from the sheer volume of visitors. As your site gains popularity, you can experience significant scaling issues (as Twitter is currently experiencing). Thanks to Amazon, many of those issues can be temporarily avoided by taking advantage of the S3 services.

Now, thanks to the new services that Amazon plans on providing, even the non-tech saavy individual can benefit from Amazon’s economies of scale. Although there are gains though, there is still a downside. As the article highlights:

Sellers are effectively paying to ship their goods twice. But the program is aimed at small online retailers who have filled up the space in their basements and attics but want to avoid buying and managing their own warehouses.

One has to wonder though if this is a good sign that Amazon has begun granting access to small businesses. Amazon is under the pressure of stockholders to produce consistent revenue growth, but as that begins to slow (although that wasn’t the case last quarter) Amazon has been forced to look in new places for revenue. Their target market? Small businesses. I wonder if this is a single occurence, or if it is a trend that will become more common as technology companies try to find new sources of revenue.

Yesterday, Duncan Watts posted an interesting article about the effect of cumulative advantage in the music and movie markets. Through an online study of more than 14,000 participants, Watts, along with Matthew Salganik and Peter Dodds were able to draw a few important conclusions. The most important finding was that while quality had an impact on listener choices, social-influence had a much larger impact.

Because the long-run success of a song depends so sensitively on the decisions of a few early-arriving individuals, whose choices are subsequently amplified and eventually locked in by the cumulative-advantage process, and because the particular individuals who play this important role are chosen randomly and may make different decisions from one moment to the next, the resulting unpredictably is inherent to the nature of the market.

The findings of the study support the strategy adopted by both the movie and music industries. Production companies diversify across a number of products since a small percentage are successful (somewhere around 1 in 10 succeed in the music industry). What are the implications of the study in regards to marketing?

I personally interpreted the findings to suggest that yet again, the most important marketing strategy is word of mouth marketing. I suggested this last week in my article “The End of Mainstream Marketing”. Conversely, mainstream marketing may still be effective as a way of communicating a certain product to key influential consumers. Ultimately, the results of the study further support the idea that luck is a major factor in a successful business. I am a believer of the idea that thought leaders can help to guide consumer decisions but in the end it is ultimately up to the consumer to decide. By diversifying your marketing strategies, you can help increase the odds that your product or service reaches the hands of influential consumers (the consumers that are discussed in Malcom Gladwell’s “Tipping Point”).

Yesterday evening Google announced the trial of their TV Ads. I wrote about Google’s future advertising control panel in January. TV ads are just one addition to the many that will come over the next couple years. While this will not be the same as AdSense for TV, it will be auction based and priced using a CPM (cost per thousand) model. I would be interested in seeing how this interface works. One of the largest advantages of utilizing Google’s new TV advertising platform is the metrics provided by the system. As Google expands into new advertising markets, they will attempt to become the single largest advertising brokerage in the world. Their decision to enter the television market now may be a result of the web video conglomerate put together by News Corp, NBC, Yahoo, MSN, and AOL. The sooner Google enters the TV market, the better the odds of them competing against the future major media conglomerate.

Once a week it seems that a new financial analyst comes out with astronomical projections about Myspace’s monetization of traffic. Last week I wrote about an analyst that’s projecting in excess of $30 million a month for Myspace. Then today, Business Week published an article referencing a Merrill Lynch analyst who believes Myspace will generate $271 million this year. While these projections differ greatly, they are both fairly significant. If Myspace can generate anywhere near these numbers, I have to believe that Facebook is on path to become a highly profitable company. The real challenge that will face these companies is not whether or not they can attract visitors, since they have already proven their performance. Instead, the challenge will be forging long-term relationships with advertisers and custom advertising campaigns. As Google has embraced their role as a leader in online advertising, so too must the social networking juggernauts.

The Wall Street Journal has published an article stating that Viacom has filed a lawsuit against Google for copyright infringement. Viacom is seeking more than $1 billion in damages. While I assume that this will be a long trial, if Viacom was successful that would raise the cost of YouTube to a whopping $2.65 billion. This is all on the heels of Michael Eisner’s announcement that he would be investing in a new online video startup that will produce high quality productions aimed at distribution via the web.

This news highlights the fierce competition that is going to pan out in the online video marketplace which is in its infancy. Google’s decision to invest $1.65 billion in YouTube may turn out to have been a bad decision as the year progresses. Although I have a funny feeling that Google’s decision to purchase YouTube was not based on their ability to store millions of viral videos, but rather their ability to integrate into their future tv video advertising platform. After all Google is an advertising company.

My guess is a settlement will be reached and all Viacom videos will be removed from YouTube. After all, Google Video has always avoided posting copyright content. YouTube will most likely have to do the same in the end. I’m interested to see how Google turns YouTube into a profitable investment.

With the recent announcement of Yahoo’s Brickhouse program it seems that more and more people are catching on to the idea of tech companies creating venture capital divisions. At the beginning of December I wrote about how Google should start up their own VC division. Yesterday, Arik Hesseldahl of BusinessWeek.com examined “What to Do with Apple’s Cash”. He suggested that Apple should create their own venture capital fund. Also yesterday John Battelle examined what Google should do with $11 billion in liquid assets. How about Apple, Yahoo, Google, and Microsoft throw some money into one huge super-fund? Alternatively, they could graciously donate their money to Ford or General Motors who I’m sure would gladly accept.

The only problem I have with the concept of a super-fund is that it’s counterintuitive. It isn’t business smart. No corporation should be dolling out money at start-ups. Conversely, there are plenty of cash heavy multi-national corporations that have more money than they know what to do with. Why don’t they each donate a billion dollars to curing cancer or aids? Any ideas?  How would you spend a couple billion dollars?

Both the Wall Street Journal and The New York Times have published articles discussing the impact of a proposed merger between XM and Sirius Satellite Radio that was announced last week. I posted about a possible merger back in November but the official announcement came last week. The New York Times has reported that the deal would end up with Sirius paying a premium to XM Satellite Radio shareholders. Why would Sirius pay a premium when in most mergers of equals there is rarely a premium paid? Well as the New York Time explains:

Things become clearer, though, when you look beyond the numbers and consider the psychology behind the deal. Because of the possibility that Washington could block the transaction, Mr. Karmazin said that nobody wants to look like the loser if things go bad. “You want to make sure if it doesn’t happen, no harm, no foul,” he said.

So although a merger has been announced, there is going to be some major regulatory hurdles for both companies. Since XM and Sirius are the only competitors in the satellite radio industry it will be extremely difficult for the deal to get approved considering the merger will create a monopoly. The only chance for approval is based on the fact that competitors to satellite have begun to and will continue to emerge. Additionally, Mel Karmazin believes that the deal “can be rushed through the regulatory maze while the Bush administration is still in power.” It will be interesting to see how this ends.