Susan Mernit's Blog

What do ringtones, magazine articles, videogames, digital music downloads and online garage sales in common? They often feature items that cost under $5.00, and they collectively add up to a multi-billion dollar business. In fact, the Gartner Group predicts that micro-commerce opportunities for new products and services will generate $60 billion in revenue per year by 2015--and that eBay and Craigslist may be the main delivery systems for these sales (Steve Rubel, you're brilliant).

Some stats:

• Mobile games will grow to a $3 billion market by 2006, according to In-Stat/MDR.
• In 2003, cellular ring-tones made more than $3.5 billion in 2003, according to the ARC Advisory Group.
• Digital music downloads will reach $3.2 billion in revenue by 2008, according to Forrester.
• 14 million Americans age 12 and older digital content for less than $2 in the past year, according to Ipsos-Insight.
• 37 million Americans would use their credit, debit or charge cards for purchases of $5 or less, according to Matt Kleinschmit, research director at Ipsos-Insight.

• More and more people are shopping online, especially for holiday gifts.
• Many shoppers don't live near high-end stores.
• Online department stores can meet the need for exclusive goods, without much price resistance.

Horyn says: "For luxury retailers, the challenge is how to leverage their prestige without appearing snobbishly out of touch. Neiman's, for instance, is developing custom home pages. Tiffany's Web site shows how engagement diamonds are cut and set, believing that consumers want more for their money than the luster of a name. "

All true, but what the story misses:

• Although high-end department stores offer luxury goods online, they aren't making big money on a regular basis from online shopping. Revenues at NeimanMarcus.com and Saks.com are a small part of their total, and these sites are considered marketing more than a revenue driver.
• Luxury goods makers generally have a strong resistance to selling online because of issues of branding and consumer experience. Prada, which gets lots of play in this story, doesn't offer merchandise on its web site--and while Amazon partner Raffello has Prada product on their site, a Froogle search on Prada skirts shows just 59 results, as opposed to 159 for a DKNY skirt query (and even DKNY doesn't sell direct to consumer online.)
• There is a limit to the kind of high-end merchandise a shopper will buy online--home and style goods, handbags, even shoes do well. But few women are going to buy expensive dresses, pants, coats and items that require fit (and touching fabric/texture) online unless custom fit mechanisms improve--but the high-end ain't there yet (cept for Nike, of course.)
• The smaller designer outlets--Net-a-porter.com, Vivre.com, Yoox, Girlshop.-- focus as much on trendy merchandise and smaller designer as luxury brands--and while their businesses are growing, the margins are cruel.

Mediapost has new data to support the idea that gas prices and remote locations are factors that fuel online shopping and purchasing--only their data suggests that rural residents are most interested in looking at online storefronts for businesses they can shop in the real world as well.

According to a Hitwise report released this week, "consumers living in the rural United States were responsible for about 44 percent of traffic to online shopping and classifieds sites for the four weeks ending Dec. 4. By contrast, Americans living in urban areas contributed to about 15 percent of e-commerce traffic, suburbanites made up about 24 percent, and small city dwellers made up about 16 percent of all traffic. "

This data suggests that local shopping and coupons initiatives like ShopLocal, which is a newspaper-linked product owned by Knight Ridder, Gannett and Tribune, will do well in smaller markets, where mom and pop stores hold sway (unless people feel the same sort of affinity with their local Walmart.)

Yep. Gawker searched on I love Jews on Google and this came up (and still does!)

And ya know what--it does the SAME THING on AOL Search.

• Ad revenue: Has potential, but unclear what $$ could really look like for any specific blog
• Services companies like Six Apart--clearly making $$
• Software companies--doubt on anyone sustaining a market lead long enoug to make real dough.
• Trade publishing model (a la Calcanis with 60+ mostly niche blogs)-Has promise, but is it new model?

As more people make money, this conversation will evolve. More tk, always.

1. Don't pander, don't preach.
2. Respect their far-from-monolithic culture.
3. Celebrate good kids and their achievements but not too much, and not exclusively.
4. Truly give voice to young people.
5. Don't fear controversy.
6. Never report a problem without suggesting solutions and/or resources.
7. In presenting stories, color, energetic photos, playful graphics, and variety on every page help.
8. Make stories interactive.
9. Ask and your teen readers will respond.
10. Use your Web site and newspaper together to create a dynamic community.

Truth is, these are good guidelines for any web site, magazine or media product. What other teachings would you add to the mix?

1. I can't totally redesign my MSN Space (I don't have access to the HTML/CSS that makes up the templates).
2. I can't get my own domain (like www.scobleizer.com).
3. I can't put Google Adsense ads on my blog (and I can't move or remove MSN's ads from my blog and I can't figure out any way to get revenue sharing from MSN).
4. I can't get more than 10MB of space. (Only photos count against that limit, but I have 8,400 photos on my hard drive, so can probably fill up the limit pretty quickly).
5. There's no developer story (no API you can use to build stuff). I'd like to see developers, like Laszlo, build things like their BlogBlox for MSN Spaces, but that isn't possible.
6. There's no service integration story (no Feedster, Pubsub, Technorati, Del.icio.us, Memeorandum links, etc).

And so on..