October 07, 2008

Spokeo: Ad-based Service Was a Failure, Declares Web 2.0 "Over"

A year ago, Spokeo entered my view as a service that would let you follow all your friends' updates across multiple social networks. At the time, the idea that you could see all their updates, from MySpace to Friendster, as well as follow all your RSS feeds in one place, was quite compelling. But even then, I said, "there's always the question of "How will they make money?" Not surprisingly, their approach of building a large user base, and slapping ads all over the place, gathering the pennies where they fell, simply didn't scale.

Their timing was also impeccably poor, as just two weeks after my initial post, FriendFeed debuted, ushering in a new level of expectations for social following and engagement.

Tonight, in a blog post by Harrison Tang, the company's founder, he writes that "as most of you would agree, the Web 2.0 era is long over", recounting that the company "ran ads for 3 months in the beginning of 2008, and we quickly realized that even if we grow the traffic by 100 times, we still couldn’t cover our basic costs."

In what's a complete 180 from their initial free model open to all who grabbed beta invites, Spokeo has revamped, making itself a premium play, and has flipped the data on its head, being less about tracking friends, and instead, tailoring it toward HR professionals who want to do some detective work on potential hires. (See: www.spokeo.com/hr)

This new model actually falls further into what people often called "Spook-eo", as the service can dredge up items you might have thought had been long since tucked away in the Web's archives. But Spokeo, after having launched with big expectations, has clearly scaled back, and is facing a new reality head on, trying to salvage something. As Harrison wrote, "Advertisers aren’t dumb, and they won’t pay for ads that don’t work forever." I've been outspoken in my distaste for display ads on Web sites, and think they're not the solution to all that ails the Web. Even services and blog networks more mature than that of Spokeo are going to struggle as ad budgets dry up, and differentiation decreases.

An example of an update within Spokeo's new interface

If anything, Spokeo has never been one to shy away from questionable publicity. You might recall in the wake of Google's auto-friending debacle last December, Spokeo made no changes and held their ground. But I don't know that I was waiting for them to declare Web 2.0 "over". Maybe the "ads + free" model is on thin ice, but Web 2.0 is and was about more than that. Should be interesting to see if Spokeo can turn the corner with their new approach, and if HR professionals will come their way instead of relying solely on LinkedIn. I think they'll find this new road a struggle as well.