Editor’s note: Kakul Srivastava is CEO and co-founder of Tomfoolery, Inc. She was General Manager for Flickr from 2004 – 2009 and helped the product grow from 37,000 users to over 60 million. Simon Batistoni is VP of Platform and co-founder of Tomfoolery, Inc. He joined Flickr in 2006 as the engineering lead for internationalization.
People can’t help but look at the Tumblr acquisition through a lens colored by the many examples of large, public (and often screwed-up) tech acquisitions by Yahoo and others — Marissa even refers to it in her blog post announcing the deal.
As leaders who helped to guide the Flickr team in its early history at Yahoo!, we had front-row seats as Flickr was (sometimes painfully) integrated with the larger Yahoo! organization. Despite this pain, we believe that Flickr has come a long way as part of Yahoo!, and yesterday’s announcement of a major redesign and refocus is a testament to the continued excellence of the core Flickr team.
Kakul, a product/business professional, joined Flickr just as the ink dried on the acquisition deal. She represented Flickr’s needs through painful acquisition-integration check-ins and figured out how (and if) any of Flickr’s roadmap needed to change based on Yahoo!’s larger corporate needs. Simon, a hacker/engineer, was responsible for creating the translation technology and internationalization infrastructure that allowed Flickr to begin serving customers in Yahoo!’s overseas markets.
Yahoo! is on an upswing — at least in hype — and hope is rampant.
The advertising powerhouse has acquired fast-growing sites featuring rich-media content and extremely passionate communities.
There are ardent reassurances that independent growth will be nurtured.
Both products are missing “e”s in their names.
So as former Flickr employees, here is some practical advice from us to our friends at Tumblr, humbly shared:
Don’t pretend it’s not happening or that it doesn’t matter.
Regardless of who’s involved, acquisitions always make communities nervous, if only because they represent significant change. For some people, an acquisition can feel almost like a betrayal, and some Tumblr community members will be looking for any reason to justify their distrust of the situation.
The more honest you can be about the direction you’re taking and the reasons behind it, the better. Give your members a means to easily communicate back to you — the Flickr Forum, while sometimes contentious, has always been a great bellwether of how the community feels, as well as an opportunity for the team to explain and (hopefully) reassure.
Open discussions can be exhausting to manage, but they’re often more rewarding (and instill more confidence in your community) than pronouncements with no outlet for feedback. Avoid reassuring platitudes that gloss over the issues – if putting ads on the Dashboard will allow you to reach a goal of tripling annual revenue, it’s better to say so plainly. Honesty is appreciated by most communities, even if the truth is unpleasant.
Don’t forget you’re awesome.
Merging your company culture with another is a bit like combining a Trifle and a Tiramisu into a single dessert, layer by layer — hard work, probably messy, and it might taste a bit weird for a while. Losing focus on how you all work together can make the difficult moments seem worse than they really are.
Don’t forget that your culture isn’t just important to you — it’s important to Yahoo! too. Over the years, Flickr had many opportunities to influence the wider culture at Yahoo! including:
Innovative approaches to database sharding, website localization and geographic data handling which were adopted by other teams, and informed company-wide initiatives.
A highly productive team culture focussed around continuous deployment, which influenced a general trend towards faster development of many Yahoo! products.
Faceball, one of many ongoing experiments in office clowning, which became something of an official Yahoo! “sport,” and was even played live onstage by senior company management.
Tumblr can set new precedents on how to join and influence Yahoo!’s culture and management. Equally importantly, a truly strong product is usually the result of the strong, connected team behind it. When acquisitions wither on the vine, it’s often a symptom of that team having dispersed over time, taking too much knowledge and culture with them.
However, the magic that really binds a team is larger than any one individual and can persist through multiple “generations” of people, provided everybody feels ownership of it. Ensure that new team members understand the value of the culture you’ve built, and the history that led you from being an experimental blog engine to a 400-million-user powerhouse.
At Flickr, we had several traditions to aid in ensuring that history and culture were passed along. When veteran members left the team, they were asked to provide a “last lecture,” summarizing the most important things they knew, and the lessons they’d learned at Flickr. Equally, new employees spent time with managers from each department during their first week on the job, learning more about how the team operated, the product philosophy, and the engineering infrastructure that made it all work. Every new Flickr team member was also encouraged to spend a day answering member help questions, which allowed everyone to understand how to communicate with the community, and the common problems they had with using the product.
Finally, the importance of goofing around was also underscored by regular bouts of spontaneous dancing, foam-dart wars and liberal posting of lolcats on the walls.
Plan for the Bear Hug.
Yahoo is a friendly place — and everyone will want to greet the new neighbors. Everyone will want to figure how they can work better with you. Everyone will have ideas about what Tumblr can do to support their property. By and large, these meetings come from a genuine desire to be a better partner, but they can take time and focus away from your core mission and slow the whole team down. Sometimes too much of this “love” can be overwhelming, and at times it definitely led the Flickr team to handle the overtures less than gracefully. In some cases, this led to relationship management headaches for years.
Allocate a “first point of contact” to triage the ideas and opportunities that come your way. Filtering in this way will allow you to seize the best opportunities and execute well on them, without draining your resources trying to handle too much. And remember that, while the occasional approach will be from someone furthering an agenda of their own, most folks are trying to help both Yahoo! and Tumblr get better. Even if their approach is clumsy, they mean well.
Tumblr has promised to continue executing on its own roadmap, and right now that’s essential. But Yahoo! wants 1+1 to equal 5 (or even 15), not just 2. Back when Flickr was acquired, it seemed everyone was thinking about what the “Flickrization of Yahoo” might mean — except for the team at Flickr. We just wanted to keep Flickr as “Flickrized” as we could. In our case, we missed out on some promising avenues for product improvement and growth.
Don’t forget to leverage what Yahoo! can really add to your business. Whether it’s 24-hour datacenter support, the world’s largest Hadoop cluster, international legal expertise or better Tumblr schwag, you now have access to the resources of a large company that wants you to succeed. Relying on these resources whenever you can will free you up to focus on the things — your core team and your product — that you’re truly the experts on.
Know how deep the rabbit hole goes.
For both parties to really benefit from the acquisition, Tumblr will need to embrace certain Yahoo! technologies and infrastructure, but sometimes a successful integration can be much more complex than it initially seems. Will it require that you host Tumblr in Yahoo! datacenters? Perhaps you’ll also need to start using Yahoo! IDs or introduce new features to comply with foreign laws? When large, complex “sub-problems” crop up halfway through a project, the knock-on effects can cost months of time to address.
Make sure you’re always asking questions and scoping out the entire landscape – a large company like Yahoo! has some intrinsic challenges and approaches that will be unfamiliar, and you need to be ready to embrace and work through them. Being a part of Yahoo! will subtly change a few things about how you do business.
You’re a bigger target for hackers hoping to get access to Yahoo! data, or to “punish” Yahoo! for a mistake that might have nothing to do with you.
You’re a bigger target for opportunists like patent trolls looking for a quick payout from an “Internet giant”
Yahoo! is a multinational company with offices in many countries — the legal landscape in which you operate will likely change as a result.
Don’t be afraid to reach out to people for a “gut check” even if you feel like you’re asking a silly question. It’s better to spend 20 minutes before you start ensuring that your security measures are adequate, or you’re legally compliant, versus having to significantly rework a project after you thought it was finished.
We are still passionate advocates of Flickr, we use Yahoo! Mail, and run our company blog on Tumblr. We are thrilled about these marriages and can’t wait for you all to show us how well it can be done.Read More →
According to a new study, we really don’t have to worry too much about the nearly 1 in 4 children without access to FarmVille at home.
“Our results indicate that computer ownership alone is unlikely to have much of an impact on short-term schooling outcomes for low-income children,” report Robert W. Fairlie and Jonathan Robinson in a new study of a large-scale randomized computer give-away experiment in California. On the one hand, it’s good news that doomsday predictions for computer-less children have been exaggerated. However, giving out computers was one of the easier solutions to closing the poverty educational outcome gap, and now we have to go back to the drawing board.
“We find that even though the experiment had a large effect on computer ownership and
total hours of computer use, there is no evidence of an effect on a host of educational outcomes, including grades, standardized test scores, credits earned, attendance, and disciplinary actions,” explains the new report, contradicting previous evidence that children without Internet had a severe disadvantage on exams.
Based on the (reasonable) fear that lack of computer access was hurting poor students, California gave out computers to 1,123 students in grades 6-10 attending 15 schools across the diverse central California area. Most importantly, the data-savvy administrators randomly selected half the students as participants, so that we wouldn’t have to worry about whether those who took up the offer were unusually motivated.
True to their worries, 49 percent of the children didn’t even know how to download a file from the Internet. Naturally, computer use went up, but so did their access to less-than-educational games. “We find that home computers increase total use of computers for schoolwork, but also increase total use of computers for games, social networking and other entertainment, which might offset each other,” surmise the researchers.
Of course, having computers may have non-educational benefits. Basic computer literacy certainly helps in a knowledge economy. But the real problem is that many poor kids never even get a shot at information technology jobs, and the rich-poor gap is only getting worse. The SAT gap has grown 40 percent and college completion has skyrocketed 50 percent since the 1980s.
This means that the likely culprit is far more insidious: the family and environment. I taught at-risk youth for years and saw first-hand how parents who didn’t prioritize college paralyzed their eager children. In my home, it was expected that I go to graduate school before I even knew what it was.
Children without the same expectations have a severe disadvantage, and no gadget is going to fix it.
[H/T: @markwarschauer]Read More →
There is a misperception about the new Google Cloud Platform that the company put into general availability last week at Google I/O. It’s not a brand new platform. It’s what Google has used for years. It is Google’s foundation. It is what makes Google, Google. And now it’s open for the first time to developers and businesses.
Google Platform is new in the sense that anyone can now use it. But until now only a relative few number of people have had access to the platform.
Google Cloud Platform officially launched at last year’s Google I/O. So it still has a lot of hype that comes with a new Google service, especially at an event like Google I/O. It does not have the full set of features that comes with Amazon Web Services (AWS). A customer can get a much deeper service level agreement (SLA) from Windows Azure. Customers can use a platform-as-a-service (PaaS) like Openshift and leverage the Red Hat infrastructure. OpenStack is an option for companies that want to build out their own open cloud environment. Go that route and a customer has a host of vendors to choose from. Red Hat, IBM and HP are just a few to choose from for any number of software and services.
The Power Is In The Network
But there is one thing in particular that sets the Google Cloud Platform apart. And that’s the network that connects the company’s data centers so questions can be answered in milliseconds. It’s what makes it possible for Google to offer 3D maps, translation APIs and Google Glass.
“It is blazing fast,” said Will Shulman, co-founder of MongoLab about the network in a panel at Google I/O about distributed databases. “The other thing – it has a private distributed backbone between all the data centers.You are talking over Google’s backbone, not over the Internet.”
The network speed makes a difference in a few ways. The compute and storage in Google Compute Engine are separated but for the user it appears as if it is all together because it is so fast. It’s like having one giant, programmable super computer that in reality is distributed across thousands of servers.
The network speed also helps make a difference in cost. With the speed, comes the ability to process more data in less time.
Google factors its network into its pricing, much like cloud provider ProfitBricks does. ProfitBricks uses InfniBand, which offers more bandwidth capably than Google’s 10 gigabyte network. Regardless, Google’s fiber network and data center optimization provides the opportunity to offer sub-hour pricing, down to the minute.
On the Google platform, a customer can double the cores and do a data job in 30 minutes at the cost that it would normally take an hour to do.
Google views data centers as living things. They are not islands but exist in a connected world, connected to devices, other services and other data centers.
It’s this view that shows why Google has to be so considerate of its own network. The world is becoming a vast data fabric. But networking is expensive. Compute and storage costs continue to decrease but networking has not gone down at the same pace as CPU and storage, said Google Product Maanger Amit Argawal in a presentation at the Open Network Summit last June.
What it costs to connect a 10 gigabyte pipe between two regions in the United States is different from connecting different countries in Asia, where the markets are emerging fastest, In the video, Argawal says in the video. Devices are ubiquitous and disposable. Someone can lose a smartphone, buy a new one and be back up in a half-hour. The data is in the cloud not on the device. The services in turn are populating across the network. Put together it’s a virtuous circle. The network needs to be fast and interactive. If not, user engagement will slow. High availability needs to be built into all layers of the stack.
Why Developers Play A Crucial Role
To allay networking and other costs, Google has to continually keep its operations running optimally. The Internet business model means services have to be free or for a small fee. That means Google has to make sure developers are building apps on services that will help Google extend its advertising products and low-cost cost subscription services such as Google Apps.
And that’s why Google Cloud Platform plays an important role in attracting more developers, who in turn help extend Google’s properties.
For example, Google talked at Google I/O about how it offers tools to help developers integrate into the Google back-end. Google Maps, Chrome. Android and BigQuery all have these integrations. Google Glass will get integrated but for now it is not the number one focus.
AWS has a rich developer ecosystem and has a deep selection of services to offer. But Amazon is not an identity and services provider like Google is. Google has more data to offer developers so that will also be a strong selling point going forward for the company with developers.
For Cloudant, a distributed database company, it’s the fact that there is now another community outside AWS that it can tap. “There are a large and growing number of developers on Google,” said Co-Founder and Chief Scientist Mike Miller, who also sat on the distributed database panel.
Google App Engine symbolizes some of the differences that may attract developers. Google announced at Google I/O that PHP would be offered on Google AppEngine. This will make Google available to the scores of web developers who have built their web sites with the programming language. In March Google acquired Taleria, showing its continued emphasis on building out support for dynamic programming languages and need for systems that scale out efficiently. From Frederic Lardinois post about the acquisition:
The company claimed that its technology allowed developers to “handle more users with fewer boxes, without changing a line of code.” Talaria also claimed its ” server lets you keep your favorite high-productivity languages, but with the scalability and performance you’d expect from a compiled language.”
And then there is the ease of use that Google is trying to offer with Google App Engine. These include back-end as a service tools and more management features that allow developers to focus more on the code then the back-end.
That’s important for companies such as OrangeScape, a “visual PaaS,” for non-developers to build apps. CEO Suresh Sambandam said that means the company can keep its IT team relatively tight.
Google has a network that makes it arguably one of the largest carriers in the world. But it’s the cost of these data centers that will be its biggest challenge going forward. It’s almost as if Google had to open its infrastructure to extend its distributed network as efficiently as possible while continually attracting developers to scale its business model.Read More →
Larry Page thinks we are, as a population, too negative. Especially the tech community.
It’s a topic that he tackled a few times during his surprise Q&A after this morning’s Google I/O keynote, and it actually ended up being one of my favorite bits from the entire three hour presentation.
The solution? Amongst other things, Larry wishes the world had some sort of permanent Burning Man-esque place for crazy builders to just be crazy. A place with less societal pressure, and without antiquated laws makin’ things sticky.
Early on in his post-keynote speech, Page dug into the tech community for focusing too much on Company A vs. Company B:
“… We’re at maybe 1% of what is possible. Despite the faster change, we’re still moving slow relative to the opportunities we have. I think a lot of that is because of the negativity… Every story I read is Google vs someone else. That’s boring. We should be focusing on building the things that don’t exist.”
It’s something I’ve touched on before, and have been meaning to go back to for a while now. Even when something is quite clearly labeled as an experiment from day one — as with Google Glass — we collectively rush to lampoon it.
“No one in the entire world would want this!”, shouts one site. “It’s the next Segway!” shouts a dozens others. “But at least they’re trying something crazy,” shouts pretty much no one.
Is Google Glass a bit strange? Absolutely! It’s weird as hell. But it’s also a rare example of a company using their mountain of spare funds to try something crazy. It’s Sergey Brin gettin’ his Tony Stark on. It’s something we should absolutely be encouraging. It doesn’t have to win or lose. Few companies have the resources and talent to build crazy, real-world crap just to see what happens. Even fewer of those are willing to.
In response to a question on how we could change the tide, and make the world a more positive place for people to build weird new things:
Yeah that’s a really good question. I think people are naturally concerned about change. We’re changing quickly, but some of our institutions, like some laws, aren’t changing with that. The laws [about technology] cant be right if it’s 50 years old — that’s before the Internet. Maybe more of us need to go into other areas to help them improve and understand technology.
We don’t want our world to change too fast. But maybe we could set apart a piece of the world .. I like going to Burning Man, for example. An environment where people can try new things. I think as technologists we should have some safe places where we can try out new things and figure out the effect on society. What’s the effect on people, without having to deploy it to the whole world.
(If you think about it, this is exactly what Google is doing with Glass, constrained to limitations of not actually having a dedicated physical space to do it in)
Is it a bit Island Of Doctor Moreau? Sure, though it probably involves more rockets and robots than it does Leopard-Men and Beast Folk. But I’d buy a house there — or at the very least, I’d book myself an annual trip.Read More →
As online advertising transitions from desktop to mobile — research firm Gartner predicts that the global mobile ad market will grow 400% by 2016 to be worth $24.5 billion — it stands that startups operating in the wider mobile ad ecosystem are well-placed to benefit. To that end, click-to-call startup Freespee is announcing a neat tie-in today with Nasdaq OMX, Stockholm-listed Tradedoubler that will see the performance marketing network offer advertisers clickable phone numbers and, crucially, call tracking analytics in their mobile (and desktop) display ads.
It builds on Freespee’s proposition that if an ad can offer a painless way to initiate a phone call, those that take up that offer are likely to convert, and that for many types of businesses, especially local ones, a sale invariably takes place via a phone call no matter from where or how the lead is generated. Therefore it makes sense to not only build technology that makes that user-journey — online ad to phone call — as frictionless as possible, but also trackable. Otherwise it’s very difficult to know where to put your ad dollars. Furthermore, mobile ads are the perfect candidate for click-to-call, lest we forget that smartphones make calls, too.
Freespee says that Tradedoubler, which claims 140,000 website publishers and 2,000 advertisers use its performance marketing network, is utilising its platform and API to offer click-to-call and analytics. “The beauty of Freespee is we don’t have to reinvent the wheel – we can add clickable, trackable phone numbers to our desktop and mobile ad formats with just a couple of lines of code,” says Rob Wilson, CEO of Tradedoubler.
Canned statements aside, it looks like a decent client win for Freespee, and builds on the startup’s recent momentum that saw it raise €3.3 million (approx. $4.3m) last October in a new round of funding led by pan-European early-stage investor Sunstone Capital. This brought the total raised by the company to €5.2 million.
At the same time Freespee announced the launch of its own ad network, dubbed Freespee Ads, to compliment its Freespee Analytics product, which focuses on providing analytics to measure and track the success of mobile click-to-call ad campaigns. The latter comprises “management functions, real-time number provisioning, call tracking and conversion attribution” to enable advertisers to optimise campaigns based on which destinations generate the most calls and actually convert to sales.Read More →
Thank you, Newt Gingrich, for this YouTube gem; I think America needed a good laugh. Last week, the former Republican presidential front-runner and moon colony-enthusiast called upon the wisdom of the Internet to come up with a term for an Internet-connected phone, apparently not knowing that they are already called “smartphones”.
If we had told you that Newt Gingrich’s “multimedia production company” had made a YouTube video titled “We’re Really Puzzled”, it would have been too ridiculous to fabricate. We cannot make this up.
“You probably think it’s a cell phone,” said Gingrich. “But think about it, if it’s taking pictures, it’s not a cell phone…This device, is something new and different. I’ve been calling it a handheld computer.
It gets better: “So having failed for several days to come up with an adequate term for the device we call a “cell phone,” we want to open the discussion up to you. Let us know in the comments what you think we should name it, and we’ll feature the best ones in a future newsletter.”
The YouTube comments are priceless:
–”i reached out to laurent too. Issa is participating in Bloomberg’s march for immigration
–”Smartphone? How about smartphone. Oh hey, look, we already call it that.”
–”I suggest calling it a “horseless telephone.”
–”There’s a book on the shelf behind him titled “Social Marketing”. LOL”
Ironically, Gingrich made a rare bipartisan endorsement of the wonky open government book, Citizenville, from California Lt. Governor Gavin Newsom. “Every single conservative in this country should read it,” said Gingrich. Citizenville is arguably the most thorough account of government technology to date, and, most importantly, mentions “smartphones” 16 times. I agree, every conservative should read it.
I will leave readers with a more sober and thoughtful idea to mull over: these people want to run our government?!?!Read More →
The crescendo of media reports about the advent of a DIY printable firearm has caused an understandable uproar. In the wake of so many high-profile, mass-casualty incidents involving firearms — and a lot of impotent rage by our elected officials — it seems counterintuitive that, as we circle the wagons around the idea of passing rational gun legislation at the federal level, we can also literally create a gun.
When I was in high school, some classmates brought a crinkled copy of “The Anarchist’s Cookbook” that they printed off the Internet. I, being an inquisitive teenager, flipped through the pages with a certain morbid curiosity. I didn’t know you could make a tennis ball bomb, or even develop thermite plasma that could melt through steel, in your basement or garage. Of course, the rational part of me knew I would never experiment with such ingredients, but I couldn’t help but be a little concerned about the people who would.
Now, the Internet is no longer the provenance of a select, geeky few, but rather is a mainstream information source that often eclipses television and leaves radio and print media in the dust. What was once accessible only by people in the know is now highly publicized.
The Liberator is the first widely distributed 3D-printed pistol to hit the Internet. It can be manufactured using a commercially available 3D printer. The instructions, created and given away by cyber-vigilantes/anarchists Defense Distributed, even contain a step to include a piece of steel to avoid running afoul of the Undetectable Firearms Act of 1988, though how they plan on ensuring that less-than-scrupulous DIY gunsmiths don’t simply ignore that step remains unclear (however, the point could be moot, as the law is set to sunset in December of this year if it is not renewed). Numerous tests have confirmed that when properly assembled, the weapon can fire at least one .380-caliber round without harming the user.
There is no question that the ability to use a 3D printer to create, on-demand, just about anything you can draw up in a CAD program is the future. The disruptive potential across nearly every industry for this technology is incalculable. From the medical field to manufacturing, empowering consumers to produce will surely up-end the natural order in mostly good ways.
However, removing all friction from the process of obtaining a lethal firearm could put a functional handgun in the hands of someone acting impulsively. How many times have you been brought to a boiling rage? The kind of fury where everything that connects you to the human race fades into the background and you feel like you could almost kill. If you were peeved enough to go through with it, you likely couldn’t obtain the requisite gun before your anger subsided to a manageable level where the thought of killing repulses you — as it should.
So much of the conversation about tightening gun legislation in the U.S. is focused on keeping guns out of the hands of the criminally mentally ill. But what about when an otherwise rational person is driven to a near-murderous rage? Aren’t the hurdles to obtaining an impulse-buy handgun a buffer between the fleeting notion (and temporary desire) to harm another human being and an actual violent crime? If pushing a button and snapping a few puzzle pieces into place was all it took to convert that inert, lethal rage into something real, would it lead to more crimes of passion? The U.S. State Department seems to think so, and has demanded that links to plans for the Liberator be removed from the web (good luck with that).
This technology is already being used for the betterment of mankind. 3D printers are already being used to create an articulable replacement hand for a child in South Africa. Even NASA recognizes its potential and has plans to create a zero-gravity 3D printer, which is slated to be taken aboard the International Space Station sometime next year.
This technology is in its infancy, and, to paraphrase Dr. Ian Malcolm, learning what we can do with it will hopefully not outpace learning what we should. Free information advocates and gun advocates alike defend the distribution of the Liberator’s plans as the latest battle on the frontier of Internet freedom, saying that all information should, without vetting, be easily accessible by anyone and everyone. But the stakes are higher than ever. We’re not talking about shutting down sites hosting illegal copyrighted material for download. We’re talking about life and death now. Guns exist for one purpose — to shoot stuff.
Some people point to the high price of a 3D printer as an obstacle to a world with an unknown number of amateur gun distributors, but if there is a profit to be made, a few thousand dollars becomes not much of an impediment. The high cost of the materials and equipment has certainly not stopped large-scale illegal drug laboratories from being operated by the rankest amateurs.
Should we support an avenue for people with more intellect than sense to manufacture deadly weapons simply because of the perceived freedom it entails? I’m not sure. But I, for one, had hoped we’d perfect a 3D-printed replacement heart valve or water purification device for developing countries before yet another way to kill people.Read More →
E-commerce leviathan Amazon today is taking a step into social gaming: Amazon Coins, its new virtual currency, is now live in the U.S. To kick it off, Amazon announced that it would put $5 worth of the currency — equivalent to 500 Coins — into all Kindle Fire users’ accounts to use on apps and in-app purchases on its platform. The company says that this is equivalent to “tens of millions of dollars” worth of Amazon Coins.
Coins, which were first announced in February, are the company’s move into an area that has been a strong way for app publishers to generate revenue through their apps. In that sense, the launch serves a two-fold purpose for Amazon: a way of encouraging developers to come to its platform (something Amazon has already been working on), and to spur more revenue generation.
A lot of the talk in virtual currency of late has been around the potential for bitcoin and other new monetary instruments fuelled by a network effect. But before bitcoin became the buzz, there were already a number of other virtual currency networks run by Facebook, Zynga and many more, with aim being to spend the “money” on gaming and other apps on their platforms.
Unlike bitcoin, and more like Amazon Coins, most virtual currency is based on users redeeming standard currencies for “virtual” ones on the network in question. This money can then be used to buy new features in a game, or extend your life, or to send “virtual gifts” to friends. One idea here, I think, is that users are more likely to spend money when it’s less transparent that they are doing so; in Amazon’s case, 500 Coins sounds a lot more exciting than $5. Another is that it ties a user more closely in with a particular game and a particular platform. Amazon Coins will give Amazon a way of more reliably monetizing users longer-term.
Amazon Coins is an extension of other social services that Amazon has added to its app platform. Specifically, Game Connect lets developers list virtual goods for sale on Amazon.com — a way of also marketing those games themselves; and GameCircle is a kind of social network that lets users measure their achievements in games against their friends and other players. On top of that, Amazon also allos for in-app purchases using real-world money as well.
Amazon says that it will be offering discounts of 10% to those users who buy Coins in bulk. Developers will get a standard 70% revenue share on all coin spend.
This looks like it is just the beginning of Amazon Coins, which the company says will extend to other services on the platform — and likely outside of the U.S. over time, given that virtual currency has proven popular outside of the U.S. in markets like Asia and Europe.
“Today we are giving Kindle Fire owners $5 worth of Coins to spend on new apps and games, or to purchase in-app items, such as recipes in iCookbook, song collections in SongPop or mighty falcon bundles in Angry Birds Star Wars. And with discounts of up to 10% when you buy Coins, this is a great way for customers to save money when they buy apps, games and in-app items,” said Mike George, Vice President of Apps and Games at Amazon, in a statement. “We will continue to add more ways to earn and spend Coins on a wider range of content and activities—today is Day One for Coins.”
Whether that will ever include making purchases on Amazon.com with Amazon Coins remains to be seen — but it seems that in any case Amazon Coins will be one more way that Amazon will build out its e-commerce empire ever further.
Read More →
Amazon Coins Now Available for Kindle Fire Customers
Every Kindle Fire owner in the U.S. will find $5 worth of free Coins deposited directly into their Amazon account
Customers can also purchase Coins in bulk and receive a discount up to 10%
Tens of millions of dollars worth of Amazon Coins are now in customers’ accounts to spend on developers’ apps
SEATTLE–(BUSINESS WIRE)–May. 13, 2013– —(NASDAQ: AMZN)—Amazon today announced that customers can now use Amazon Coins to purchase apps, games and in-app items in the Amazon Appstore and on Kindle Fire. To celebrate the launch, existing and new Kindle Fire customers in the U.S. have had 500 free Coins—a $5 value—deposited into their Amazon accounts today. For customers, Amazon Coins is an easy way to purchase apps and in-app items on Kindle Fire, and for developers it’s another opportunity to drive traffic, downloads and increased monetization. With discounts of up to 10% for purchasing Coins in bulk, it’s also an opportunity for customers to save money on their app and game purchases. Customers can purchase Coins by visiting amazon.com/coins.
“Today we are giving Kindle Fire owners $5 worth of Coins to spend on new apps and games, or to purchase in-app items, such as recipes in iCookbook, song collections in SongPop or mighty falcon bundles in Angry Birds Star Wars. And with discounts of up to 10% when you buy Coins, this is a great way for customers to save money when they buy apps, games and in-app items,” said Mike George, Vice President of Apps and Games at Amazon. “We will continue to add more ways to earn and spend Coins on a wider range of content and activities—today is Day One for Coins.”
Amazon Appstore developers will earn their standard 70% revenue share when customers make purchases using Amazon Coins. No Coins-specific changes are required for developers with apps and games currently in the Amazon Appstore. Developers not yet in the Amazon Appstore should submit their app today through the Amazon Mobile App Distribution Portal (https://developer.amazon.com/welcome.html).
Amazon Coins is the latest offering in an array of services that make Amazon the most complete end-to-end ecosystem for building, monetizing and marketing their apps and games. These capabilities include:
The ability for app developers to use Amazon Web Services’ (AWS) technology platform for their infrastructure needs. Building blocks such as Amazon Elastic Compute Cloud (EC2), Amazon Simple Storage Service (Amazon S3), and Amazon DynamoDB allow developers to focus on what differentiates their app rather than the undifferentiated heavy lifting of infrastructure.
App submission for distribution to nearly 200 countries globally enables developers to reach millions more Amazon customers worldwide.
In-App Purchasing on Kindle Fire, Mac, PC and web-based games. This enables developers to sell virtual items in their apps and games while allowing their end users to simply use their Amazon accounts to make the purchase.
GameCircle, which includes capabilities like Achievements, Leaderboards, Friends and Whispersync for syncing games across devices, and leads to better engagement with games.
Game Connect, which lets developers list their virtual goods for sale on Amazon, increasing discoverability of their games and making the purchase of virtual goods as easy and convenient as possible for customers, leading to increased monetization for developers.
Amazon and its affiliates operate websites, including http://www.amazon.com, http://www.amazon.co.uk, http://www.amazon.de, http://www.amazon.co.jp, http://www.amazon.fr, http://www.amazon.ca, http://www.amazon.cn, http://www.amazon.it, http://www.amazon.es and http://www.amazon.com.br. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.