“Unlock the Digital Economy” is the theme for this year’s Web 2.0 Expo in San Francisco, the signature conference and tradeshow put on by O’Reilly Media and UBM TechWeb.
I spoke with Sarah Milstein of UBM TechWeb to get a sense of some of the highlights.
“The web is maturing,” Milstein said. “The business side is increasingly important and viable. We are interested in people who are figuring out how to exploit that.”
So who’s making money on the web and how are they doing it?
Zynga is. Milstein says that the creators of Farmville — whose branding says the company is connecting the world through games — is pulling in hundreds of millions of dollars a year from games that include CityVille, TreasureIsle and Mafia Wars.
In an article published yesterday by the Chicago Sun-Times, colleague Sandra Guy says market experts value Zynga’s worth as high as $10 billion.
The games operate from a few simple concepts: You can play the game for free. But each game has its own internal economy, Milstein says. Buy a business, give a resource. Eventually, real money is exchanged.
I’m constitutionally unsuited to these games. I lack patience. Don’t buy me tulips, please, they’ll die from lack of watering. But I do see some synergy between the news world and games. Beyond interactive 3-D crossword puzzles and chess, games hint at a sophisticated landscape that could promise anonymity and new dimensionality in solving the problems of government or create exciting new ways to connect news streams with advertising bases in localities. The Knight Foundation sees this synergy too as it is investing considerable cash into several civic–based solutions with a game interface.
Zynga holds the title of most used Facebook application with 40 million active users. The company has reportedly spent $50 million on Facebook ads alone.
So here in Chicago when my SallyVille [within CityVille] visits friend Rogers Park – my virtual version of my home neighborhood. I can fantasize that someday Zynga will build a game that will allow Rogers Park online to mirror and nourish what is happening in the real economy and community of the neighborhood that is Rogers Park.
These games are a far cry from that robust and useful potential now, but the internet is developing in unforeseen ways – one can dream?
Another company posting some success that will be appearing at Web 2.0 Expo is LinkedIn.
On March 25, I and 999,999 other professionals received email correspondence from Linked In Founder Reid Hoffman thanking us for being early adopters in the first million. I was member 897312. Linked In now has 100 million members.
Hoffman’s scheduled to speak Thursday, March 31. For now, LinkedIn’s key to “Unlock the Digital Economy” is an IPO.
LinkedIn is the pin-striped, always chipper-faced network for folks looking to make business connections — whether for sales or job leads; it will seek $175 million in the public market.
Anthony Ha of VentureBeat did a break down of the company’s fundamentals in January.
How much money is LinkedIn making now? In the nine months ending on Sept. 30, LinkedIn says it made $1.85 million in profits on $161.4 million in revenue. In 2009, it lost $4.0 million on $120.1 million in revenue
Linked-In’s revenue comes from three kitties: user subscriptions, advertising sales and hiring solutions. Its Hiring Solutions services brought in 41% of total revenue. This revenue mix doesn’t sound much different from that of an online newsroom — Help Wanted ads anybody? [If this sounds like a genie that’s disappeared from the bottle, it might find its way back in.]
A good portion of the IPO cash will beef up LinkedIn’s field services in geographic locations, basically sales of its Hiring Solutions in various cities around the US and the globe. LinkedIn shares a problem with the emerging news business. The company has a robust online site, but to grow its successful business model it needs to expand its real world field work in sales. Internet based businesses have been struggling to effectively bridge the online-to-earth gap for a decade at least. It’s one of the reasons that reinvented newspaper brands and their paper distribution streams might be more valuable than some think.
Milstein says gaming companies are doing well if they can transition from desktop to mobile. She says other hot topics include group buying and new buying models, such as those offered by chicago-based Groupon.
There’s so much online news organizations can learn from the Web 2.0 world.Check out the website and if you’re in the Bay Area, the conference runs March 28 through March 31. If you can’t make it this year, you can view sessions later online on the Web 2.0 website on O’Reilly’s YouTube channel.
O’Reilly and UBM TechWeb have another show in the fall. Milstein says the Web 2.0 New York show is historically weighted more toward exploring digital innovation in the media, so you might just want to take out your calendar and ink in Oct. 10-13, Web 2.0 this fall in New York.
You can follow Web 2.0 on its blog, at Twitter hash #w2E or on its Facebook and LinkedIn pages.
Web 2.0 Expo happens March 28-31, 2011 at Moscone West in San Francisco, CA. Now in its fifth year, Web 2.0 Expo is for the builders of the next-generation web: designers, developers, entrepreneurs, marketers, and business strategists.