I can’t tell you how many times I’ve heard the following fact: Most magazine categories only have room for two titles. However, I know of small publishers who have the #3 title in a market but who still are quite profitable. New Yorker writer James Surowiecki explores this topic in an article (quick, before it goes behind the cost wall) that uses Ninetendo as an example of how a #3 market-player can be extremely profitable.

The key to succeess in a crowded marketplace is the common sense but counter-intutitive-to-MBA-types principle reflected in the following quote from the article:

“The more a company focusses on beating its competitors, rather than on the bottom line, the worse it is likely to do. And a study of the performance of twenty major American companies over four decades found that the ones putting more emphasis on market share than on profit ended up with lower returns on investment; of the six companies that defined their goal exclusively as market share, four eventually went out of business.”

I’ve blogged for a long time that “busts” and “bubbles” relate to expectations in financial markets, and therefore, if there are few Web 2.0 companies in public markets, then it’s hard to make an argument that a classic bust can occur. However, Dave Winer makes a great observation that Google stock is the boat that floats Web 2.0. I guess one could argue that it is not necessarily the share price but the real revenue generated via Google that makes the Web 2.0 world go ’round or that Google is a sales agent for the websites, rather than vice-versa, but those a small points. Regarding the big picture, Dave’s point is correct: Google stock is a bell-weather for Web 2.0 — it’s the last e-bastion of exuberance that knows no rational limit. Its inflated valuation is what powers the spread-sheets of startup founders and many of the VCs who fund them. Even if you disagree with what Dave is saying, it’s definitely worth reading.

Speaking of a “Web 2.0 bust,” last week, I spent some time with a friend who is a wise and seasoned expert on the topic of bubbles and busts, as well as Web 2.0 investments. I asked him about how a “bust” could occur, despite my aforementioned theory. He immediately mentioned Google. But he also added a brief explanation about the problems that can occur because small investors now have the ability invest (and lose everything) in hedge funds. It’s a topic about which I know nothing so I apologize for not being able to explain why the ability to invest $10,000 in a hedge fund is a dangerous thing. But, at least according to the smartest guy on this topic I know personally, it is.

Technorati Tags: google, web2.0

Introducing a new buzz term: video sidebar. At least that’s the most obvious term I can think to call a great use of embedded video I’m seeing more and more. I am crediting YouTube with making the concept of embedded video (in simple terms, the little boxes on a webpage where video is displayed) easy to understand — and do. As I’m told often by the rexblog director of hackology, YouTube didn’t create embedded video, they just made it simple and easy for people like me to do it.

For someone with a print editorial background, seeing a text story wrap around a box in which someone can view a related story or graphic is a very easy concept to grasp: It’s a sidebar. However — despite the predictions of futurists for the past couple of decades — in print, we’ve never been able to publish a video sidebar.

More and more, in blogs and big-media sites, I’m beginning to see great examples of video sidebars. For example, there’s a great one in the online version of this New York Times article today on new approaches to the design of acoustic stringed instruments. While you can click off the page to view the video, scroll down and you’ll see the embedded video sidebar: a 3:30 minute overview of how sound is created on a guitar (and more). In this case, the video sidebar is a slowly paced NPR-ish story in which the reporter and “expert” are jamming in a workshop. The production values are excellent (perhaps better than necessary for the web), but the reporter seems a bit uncomfortable with the medium — which, frankly, adds to its believability. He comes off as someone who is passionately interested in his story and genuinely excited about sharing what he’s learned with the reader/viewer. As the story is about sound and music and design, the video displays concepts that are impossible to convey in text only.

While I’ve only been noticing video sidebars for the past few months, here are some early observations on how they are best used:

1. Use a video sidebar to enhance, rather than re-tell the main story.

2. Use a video sidebar when sound and movement are central to the story. (A sports highlight, for example, or, as even I’ve tried, a software feature).

3. Use a video sidebar when a short “how-to” will help the reader comprehend what you are trying to explain.

4. As a video sidebar merely enhances the main story, it is different than a video-blog post. On a video-blog (or other video-centric web space), the main story is told with video. [On a video-blog, the sidebar is text (i.e., links mentioned in the video) or graphics like maps, or even a transcript of the video.]

5. If you make the reader go to another page to view the video, it’s not a video sidebar. (If your boss’s metric-of-choice is page views, a video sidebar will make your reader happy, but maybe not the boss.)

6. You should allow the reader/viewer to start the video. It shouldn’t startup just because someone has landed on that page. In fact, you are a bad, bad person if you do that.

In a coming post, I’ll review some tools for creating and adding a video sidebar to an article or blog post.

Technorati Tags: video sidebar, youtube

Chris Anderson’s book, The Long Tail, has been named #1 business book of 2006 by Amazon.com editors.

That means I can point to the 2005 year-end prediction I made over at Folio: magazine’s website:

Rex Hammock’s predictions: 1. Wired magazine editor Chris Anderson’s book, The Long Tail, scheduled to be published in June, will not only be the best-selling business book published during the year, but it will help articulate and explain the economic significance of smaller publishers in the magazine industry.

Technically, it may not have been the best-selling, but I came close. Oh, and the second part of that prediction happened also with this Folio: cover story.

I had two other predictions that still have time to play out, however, I missed a big one: that the Folio: reporter whose by-line appears on the prediction story would change jobs and become editor of FishbowlNY.

Speaking of predictions, my most accurate predictions started as a joke. Using Matt McAlister’s “Dotcom Prediction Generator, I filled-in some blanks and got, upon looking back, some fairly prescient (obvious) results. My best fill-in-the-blank prediction: “A Palo Alto startup is going to open our eyes to some new ways that social media can influence culture. Business Week will pick up on this and run several cover stories on the founders.”

Really, I’m not bragging or anything.

Technorati Tags: long tail, magazines

I almost forgot that I had a contest going in which I was going to award $62.50 for a randomly selected commenter on a post for which I am supposed to receive $125 from some folks who are being paid $250 for me to post it. I won’t be doing another such post as the first one was merely a $62.50 gimmick to generate some incoming-links (note to drive-by readers: that was a joke, however I won’t be doing anymore ’sponsored’ posts).

I selected a comment randomly through the scientific method of asking someone to pick a number and then counting down that many comments.

Drum-roll please.

And the winner is Hugh Roper which is somewhat ironic as his comment was: “I don’t know if a blogger should accept pay for post, but a person who comments definitely should not.”

Congratulations, Hugh. As soon as I receive my $125, I’ll send you the $62.50 which you can accept or do-with as you see fit.