December 09, 2008

10 Top New Web Services of 2008 and Their 2009 Forecast

2008 has been both an exciting year and a very trying year for the world of Web innovation.

When the year kicked off, we were still in the middle of Web 2.0 fever. We were just two months removed from Microsoft having invested $240 million in Facebook at a stratospheric $15 billion. In the first week of January, Yahoo! CEO Jerry Yang made his first appearance at CES and promised the company was "ready and excited". By mid-month, Pownce launched to the public to offer an alternative to Twitter. And by the end of January, Twitter crashed hard - for the first time.

It turns out that Twitter's crash might have been the canary in the coal mine. Even looking at January 2008, and considering what has happened to Facebook's valuation, Jerry Yang's reign as CEO of Yahoo!, and the eventual extinguishing of Pownce in the ensuing months and it almost seems unbelievable. Of course, as you know, Twitter crashed again and again throughout the year, and in parallel, so did the fortunes of many Web companies, from the smallest startup looking to raise funds, to the monoliths, including Google and Yahoo!, who have had to rapidly make changes as the economy changes under their feet. Meanwhile, as business conditions deteriorated, the public markets were closed and valuations were decimated.

But before the doom and gloom hit, a good number of Web services pushed and shoved their way out the door in the first half of the year, and look to be here for at least the near term. Even as the second half of the year saw a drying up in new services and very little innovation, as we start to look toward 2009, there are new brands that many of us know were but a glimpse in an engineer's eye when 2007 finished and 2008 took over. And while no list is complete, here are some of the best that can claim 2008 as their birth date. I expect this will miss quite a few, so please make sure to nominate your favorites and tell me why I'm wrong!

1) Summize (Twitter Search)

Search is still king, and real-time search is having a huge impact on the way people find news, share ideas, and see trends. Summize built its business around being a search engine for Twitter, and soon became more stable, and theoretically, more useful, than Twitter itself. The Twitter team, in desperate need for more engineering help, acquired the company and absorbed into the microblogging service.

Expected Exit: Acquired - Already Complete

Twitter's acquisition of Summize was a smart move, considering how real-time search is becoming critical in times of breaking news. Many, including myself, are turning to Twitter search instead of Google, Yahoo! and the traditional news wires to hear reports from people on the ground, unfiltered.

2) Socialmedian

While many different sites have conquered the online activities aggregation space, Socialmedian went about the process in a different way than all the others, letting people not only follow friends and pipe in their shared content from a wide variety of 3rd party sites, but organized it in terms of categories. The category feature was so successful, CEO Jason Goldberg has been able to showcase specific events, including the 2008 election, and the financial crisis, and make Socialmedian a go to site to interact with "newsmakers". The site, starting from scratch in the Spring, has risen up to challenge FriendFeed, Digg and other sites for social news - and continues to grow at a rapid clip.

Expected Exit: Acquisition by First Quarter of 2009

With Goldberg and team having raised so little capital to get the product off the ground, and having kept costs very low, with the development team in India, the bootstrapped Socialmedian looks to be a ripe target for an acquisition, in my opinion. Without strong revenues and the public markets the way they are, Socialmedian would be smart to find a strong content or media partner, to join forces and enable the service to continue its growth.

3) BackType

Technorati and Google Blog Search, as well as many other directories and search engines have typically focused on the blog as the central nervous system for their offering. But as many would agree, it is the comments and conversation, no matter where they are, that have real meaning to blog authors and participants. While everyone was busy trying to see who could land on the Techmeme leaderboard or break new ceilings in Technorati Authority, BackType debuted a site that tracks comments by individual, lets you follow individual commenters across a wide variety of sites, be alerted when comments with keywords take place, and see charts that display keywords' momentum.

Expected Exit: Acquisition in Second Half of 2009

The BackType founders are working together on their second startup, having abandoned the first when it didn't gain traction. While BackType doesn't yet have an amazing market presence, they have forged a unique foothold that so far looks unchallenged. With any luck, I would expect the BackType team to deliver more enterprise-capable brand and identity management tools that would enable the service to gain revenue and exposure, letting the service to remain independent through the majority of 2009 before finding a place within WordPress, Six Apart, Google or Twitter.

4) TweetDeck

TweetDeck isn't a Web service, but this Adobe AIR application introduced new functions to Twitter usage that changed the game in terms of how people use the service. By introducing a multi-columned app that features groups, integrated search, direct messaging, and replies functionality, many are swearing by TweetDeck, and it looks like it may soon overtake Twhirl as the most popular Twitter application. Busy Twitter addicts including Guy Kawasaki swear by it.

Expected Exit: Remaining Independent through end of 2009

Iain Dodsworth is continuing to upgrade the product, and it's widely rumored he may soon integrate multi-account support, as well as integration with additional services, outside of Twitter. If he can get enough people to donate or pay for the application, there's no question he could make a full-time living from the resulting revenue. The question is, will people who expect a free service to have 100% uptime spring for the app that gets them there?

5) Strands

While FriendFeed, Profilactic and others were first out the gate in 2007 with their lifestreaming and social activity aggregation tools, Strands has worked on their own social news and lifestreaming site, in beta, since mid year. Focusing on delivering a clean interface for their Web, mobile and iPhone application versions, and keeping a strong emphasis on tracking musical preferences, Strands has developed a loyal following who find the site less noisy than some services and cleaner than others. Strands, instead of marketing to early adopters, like me, has given a great deal of focus to converting the more mainstream user, and acting as an evangelist for other third party applications, ranging from Pandora to Twitter.

Expected Exit: Remaining Independent through end of 2009.

Strands' history both bodes well and plays against them. Their VC funds offer them a strong balance sheet, but may also force the company's investors to seek a return that would be unavailable, given current market conditions. The company will need to find a better way to differentiate against FriendFeed and others, and hope that appealing to mainstream America works.

6) ReadBurner

A service that would tabulate the most frequently shared items from Google Reader was high on my list of sought-after sites in 2007. The catch is that I always thought Google would do it themselves. When ReadBurner debuted in January, it was a delight, and the simplicity of the service bred many clones, including RSSmeme. Later in 2008, its older cousin, Feedheads, broke out of the Facebook garden and entered the general Web. ReadBurner, and others like it, serve as having the potential to unseat less-democratic popular news hierarchies, such as Digg, assuming they execute well. As an advisor to the service, I'd like to say they are on the right track, or rate the service higher on this list, but development has been slow of late, and needs to get going again.

* Not Listing an Expected Exit Due to Assumed Bias *

7) Feedly

Like many other smaller services this year, especially those around the Google Reader and Twitter ecosystems, Feedly takes an existing popular product and makes it better - giving a news magazine feel to what previously had been a standard RSS reader. Feedly launched as a Firefox plugin in the middle of the year, highlighting recommended articles from friends, popular feeds, and integrating with Google Reader, so when you made changes to your Feedly, those changes tracked back to Reader.

Expected Exit: None

Feedly's founder recently noted his excitement over earning the service's first dollar, after a user Tweeted that she'd gotten distracted by an ad within Feedly and clicked through. Given most other RSS based apps haven't found any revenue yet, a single dollar is a lot more than zero, but Feedly doesn't look like it has any kind of mass that would push it to the mainstream, let alone turning into a viable business. For now, it's just an interesting twist on data consumption. The site will only go away if its developers get bored of it.

8) Gnip

With sites like Twitter, Facebook, Flickr, Delicious and others getting pounded all day by third party services tapping into their API and sucking down their users' updates, Gnip recognized these external sites might soon see backlash from the data sources, as too much of their own infrastructure was being used to power other programs. In light of Twitter's up and down summer, Gnip debuted to act as the middleman, essentially making data portability easier, reducing one-offs between services.

Expected Exit: Acquisiton by end of 2009

It's hard in life to be the middleman, trying to play equal with every service. Should Gnip really start to become the Akamai of data portability, it's likely that one of the biggest data producers would want to snap up the service for themselves, and either limit competitors' access to it, or start charging fees. In a world when VC money is hard to come by, Gnip would be smart to take the offer.

9) Toluu

You'll note two major themes regarding hot services in 2008: RSS and friends. Finding out what your friends were reading and sharing were key facets of most of the new products that gained my attention this year. Toluu, developed by Caleb Elston, offers a site where you can upload the OPML file of feeds you read, mark your favorites, and see how compatible you are with other users of the site, helping find new feeds, and new people. Over time, the service enabled me to see new blogs my friends were subscribing to, and you could even notify Twitter if you had added a new blog to your reading list.

Expected Exit: None

Toluu is a geeky hobby for Caleb. He's recently also gotten behind, a gift recommendation service. Toluu hasn't been monetized in any way, and is unlikely to develop into an acquisition target, unless another service wants to use his recommendation engine.

10) SocialToo

Twitter and Facebook have become such a part of the blogging ecosystem, that new services have sprung up to make it more useful and intuitive. Among them is fellow author Jesse Stay's SocialToo. The service looks to act as a bridge between multiple social networks, including Twitter, Identica and Facebook, letting you automatically follow those users who follow you, offering a black list of people you never want to follow you, setting up an automatic message to those who choose to follow your account, and recently, the addition of surveys that can be distributed by Twitter and tabulated on the site, much like SurveyMonkey and PollDaddy.

Expected Exit: Remaining Independent through end of 2009.

SocialToo contains some advertising, and if I were to guess, it may offer premium features, as the survey functionality could be improved a great deal, possibly even going head to head with sites like SurveyMonkey. While Jesse is unlikely to get rich off SocialToo, it's smart in that it's not tied just to one service (Twitter), but has the flexibility to add on new networks as they rise in prominence.

Also on the list but outside of the Top 10:, BlogRize, Identica, LinkRiver, OneSpot, PeopleBrowsr, Plurk, Rejaw, RSSmeme, Shyftr, Yokway