Video blogs, ready for prime time

Video blogs, a.k.a. vlogs, are booming, and Internet users and advertisers are taking note.

(Business 2.0 Magazine) - Amanda Congdon, 24, is running through the wintry streets of Manhattan in a purple cape and leotard. This may not seem like a milestone in Internet history, but it is: The perky actress is starring in the first commercial to be aired in a brand-new medium - the video blog, or vlog. Her silly superheroics are worth $40,000.

Congdon is the host of Rocketboom, a satirical news show and the most popular vlog on the Net. Despite having no budget, Rocketboom has 250,000 visitors a day, and that number is rising fast. Now Congdon and producer Andrew Baron are taking a cue from the ad-driven revenue of top bloggers: "We want to make a business out of vlogging," Congdon says.

With the proliferation of devices like the video iPod, the vlog boom is on. As of March there were more than 6,500 vlogs, says directory Mefeedia.com, compared with fewer than 300 a year earlier. Apple's (Research) iTunes store has offered vlogs for download as video podcasts since October, giving sites like Rocketboom a potential audience of 40 million iPod users.

And there's good news for vloggers who want to monetize their fame: Advertisers are getting more comfortable with online video spots. In the United States, Internet video ads brought in $225 million in 2005 and are expected to break the $1 billion mark in 2008, according to eMarketer, a New York research firm. "Vlogs are very targetable," says eMarketer analyst David Hallerman. "They're small, but they have a niche audience."

They also operate with amazingly low overhead. Baron, a former professor at Parsons school of design in New York, found Congdon through an ad on Craigslist. Now they write, shoot, and edit five new shows a week, each shorter than five minutes, in Baron's apartment. Increasingly, they rely on a team of freelance correspondents - Rocketboom fans - from around the world. "The show is just whatever we find interesting," Congdon says.

True to its unconventional style, Rocketboom auctioned off its first week of ads on eBay (Research). Bidders were warned that Rocketboom would have complete creative control over the spots. TRM, an ATM sales company based in Portland, Ore., won with a bid of $40,000. In exchange, Baron and Congdon shot and aired five 60-second spots featuring Congdon in two roles: an ATM sales rep in superhero garb, and a masked villain trying to blow up TRM.

According to TRM spokeswoman Janet Lennon, reaction inside the company was mixed. "It wasn't what we anticipated," she says. But TRM is still bullish on vlogs as a way to reach forward-thinking viewers. "We feel like this is an upcoming trend in marketing and advertising," Lennon says.

She could well be right. Not only did the commercials generate the biggest traffic spike in Rocketboom's short history, but EarthLink (Research) bought its own Rocketboom commercials shortly after the TRM deal. In addition, TiVo (Research) agreed to offer Rocketboom for free to a million broadband subscribers, hoping to use it to snare younger, hipper viewers. Baron and Congdon have other moneymaking plans in the works, such as offering subscriptions to special extended versions of the show for $4 a month.

Of course, Madison Avenue firms aren't lining up to buy ad space just yet. After all, this is a quirky, do-it-yourself medium where content ranges from the sublime to the unwatchable. "There isn't enough critical mass for us to go to a client and say, 'This is something that's going to work for you,'" says Charles Pinkerton, partner at New York-based Kirshenbaum Bond & Partners' the Media Kitchen.

That may change, however, as more vlogs boast viewership worthy of a mainstream TV show. Right now, the most popular vlogs include MobuzzTV, with a news format similar to Rocketboom's, and Tiki Bar TV, a sketch comedy series about the art of mixed drinks.

Says Steve Garfield, a veteran video producer who's organizing the second Vloggercon conference this summer in San Francisco, "People do this for artistic reasons, and for fun." Perhaps, but with sites like Rocketboom proving out the business model, you can bet that a lot of vloggers will soon be doing it for profit too.

Microsoft Social Networking Technology Spawns Startup

Wallop will depart from the friend-of-a-friend model common to many social networks, using instead a "unique set of algorithms" to automatically build and maintain a person's social network.

AOL: You've got blog

NEW YORK (CNNMoney.com) - The blogosphere just keeps getting bigger and bigger.

Microsoft to Build a ‘MySpace’

The software giant launches a new social networking site and updates its Internet Explorer browser.

Microsoft said Tuesday it has created a new social networking technology company called Wallop and updated its Internet Explorer web browser, as the software giant seeks to expand its presence in the online market, where the company seems to be fast losing its relevance.

Wallop will be a spinout of Microsoft Research, the research and development division of the world’s largest software maker. Microsoft will hold a minority stake in the company. The startup will be headed by Karl Jacob, a Silicon Valley veteran who has been a partner with venture capital company, Bay Partners, which also provided the Series A financing.

The social networking company will launch its product later this year.

Microsoft has been sketchy on the details about Wallop. But the Redmond giant said Wallop will solve some of the problems current social networking technologies sites face and will introduce a new way for consumers to express themselves online. Wallop will have a better user interface that will help make it easier for online patrons to connect with each other, said Microsoft.

“Our access to industry-leading technology through the IP Ventures program has led to a golden opportunity for Wallop to change the face of social computing with differentiated technology and unprecedented support,” Wallop CEO Karl Jacob said in a statement.

Wallop was launched through Microsoft’s IP Ventures program that lets venture capitalists, entrepreneurs, and small businesses access Microsoft innovations and build on them. The IP Ventures program is closely integrated with Microsoft’s emerging business team to provide resources to the VC community on ideas that might be incubating in the program.

Social Networking has become a busy market crowded with a number of players. The grand daddy of them all, MySpace has 67 million members, 90 percent of whom are in the United States. A quarter-million new members are added every day. MySpace competitors include Bebo, which has themed profile templates, myYearbook, Facebook, Tagged, Tagword, and Xuqa (see The MySpace Wannabes).

Still Microsoft could offer something new, said Mike Arrington, who runs the popular blog, TechCrunch.

“I’ve seen a bit of what they plan to offer, and I’ll say that this is not another ‘me too’ social network offering,” said Mr. Arrington. “And there are a number of unique business model twists that they aren’t announcing yet.

Battling for the Browser

Microsoft has been making other moves too to regain its competitive edge in the online market. On Wednesday, the company released the second test version of its upcoming browser, Internet Explorer 7.

The latest version of IE 7 sports beefed up security and additional features that could raise the pressure on rivals Firefox and Opera that have so far led innovation in the browser market.

IE 7 will offer users features like automatic detection of RSS (Really Simple Syndication) feeds, tabbed browsing that lets users group multiple sites in a single browser window, and page zoom that can enlarge individual web pages.

Microsoft is encouraging the public to download the test version and try it out. Analysts like Joe Wilcox of research firm, JupiterResearch, said despite Microsoft’s efforts, users have to keep in mind that it is still only a test version.

“Microsoft may have done a very splashy release in terms of marketing but it is still a beta product,” he said.

Still, the Redmond giant has pulled out all the stops to offer things like free phone support that competitors cannot. “You are not going to get this kind of stuff anywhere else,” said Mr. Wilcox.

Though Microsoft retains more than 85 percent of the market share with its Internet Explorer browser, the company is competing against a host of fast growing startups like Maxthon, and Avant, and old hands like Opera, and Firefox (see Browsers Battle Over Users).

Firefox, for instance, has emerged as one of Microsoft’s strongest competitors, gathering more than 10 percent of the market share in less than two years.

Microsoft plans to release IE 7 later this year but analysts like Mr. Wilcox said it is likely that the company will get it out along with its upcoming operating system Vista. After much delay, Vista is scheduled to be out in January 2006.

MySpace for the Office

BUSINESSWEEK.COM: Venture giant Kleiner Perkins is backing Visible Path in its bid to take social networking corporate.

Read on.

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Social Networking's Gold Rush

The movement continues to defy doubters and draw big investments. The latest includes $25 million for a piece of Facebook.