Think of 2008 as the year the Internet got greedy. As the recession goes digital, it's no longer enough to have an easy-to-use social-networking site, or blog software that corners the market on 13-year-olds. Now, companies like Facebook and Twitter are betting their futures on the proposition that it's time to become a hub, a place from which all other Internet activities stem. In creating our list of the men and women leading the Web, we looked to those who've courted customers and held on: Hulu.com is keeping viewers glued to television without the TV set. Facebook's new Connect platform lets users monitor what their friends are doing online. InterActiveCorp (IAC) is defining what it means to invest and succeed online; the Daily Beast, Tina Brown's news aggregator, is a favorite of journalists and bloggers alike. Meanwhile, former IAC execs are climbing the Washington ranks. Here's who succeeded the most:
The Daily Beast
For Brown, it doesn't matter if you break the story. You just have to tell it better than the competition. That's the model for her latest venture, The Daily Beast, which combines original content with collected links from her staff's favorite news sites. If that sounds a lot like the eponymous Web site of a certain Greek force of nature, that's because, well, they are very much the same. Still, Brown has made a career out of rethinking the ideas of her predecessors. Sometimes that works (see: Vanity Fair, 1984-1992, or The New Yorker, 1992-1998), other times it flounders (Talk, 1999-2001). So far, the Beast is on track to fall in the first category: after the site launched in October, Brown and Co. racked up more than 11.4 million page views in their first month. (Story continued below...)
One of the site's early successes was a wacky profile of Jennifer Lopez that Elle reportedly refused to publish because it was too critical. Now the site is using Brown's name (and the big-money backing of Barry Diller's IAC) to court the best of the journalism world's recently laid-off. Considering that the penny-pinching site is rumored to pay a mere 50 cents per word, you can expect the budget—and talent—to go far.
A key part of President-elect Barack Obama's campaign legacy will be that he Twittered, texted and Facebooked to victory in a way that had never been done before. Obama's courtship of the Internet constituency worked so well that many expect he'll hire a chief technology officer by the time he's sworn in next January. Who's going to keep our president aware of the latest digital trends? We're looking at Julius Genachowski, a basketball partner from Obama's Harvard days who convinced the candidate to go digital early in his campaign. After that strategy helped Obama win the election, Genachowski was named a co-leader of the Obama transition team that manages technology, innovation and government reform.
The two men have been friends since they attended Columbia for undergraduate degrees together, then law school in Cambridge, where Genachowski was the notes editor under Obama's editorship of the Harvard Law Review. Since then, Genachowski has been no stranger to Washington. After earning his J.D., he clerked under Justice David Souter. More recently, he was the legal counsel for Reed Hundt, the former chairman of the Federal Communications Commission. (If Obama doesn't create a new technology officer, this experience may put him in line for the FCC chairman position.)
But Genachowski's latest ventures suggest that he is better suited as a digital adviser. After leaving Washington, he became an Internet entrepreneur, serving on the boards of Expedia, Hotels.com and Ticketmaster. From there, Barry Diller courted him to serve as InterActiveCorp's chief business officer, a position he held for eight years before starting LaunchBox, a platform for Web and mobile startups to pitch ideas and receive seed funding.
If one thing hurts his chances for success, it will be his East Coast background. Many blogs out of Silicon Valley already wonder whether Genachowski is really a digital whiz kid or just another Washington wonk. "Genachowski is a lawyer who I'm sure can grasp net neutrality," writes Paul Boutin of Valleywag.com "But if this turns out to be Obama's idea of a technologist, I'm going home to cling bitterly to my guns and religion."
It's easy for skeptics to dismiss Williams and his San Francisco startup. Twitter has no revenues, despite sucking in $20 million in investors' cash since 2006, and no clear path to profitability. Its key service is "micro-blogging," an easy, efficient way to send short status updates to friends and followers via a text message, IM, e-mail or Web site—an idea that has been fingered as a symptom of cultural decline. What can you possibly say in 140 characters or less, the critics argue, and do your friends really care if you just ate pancakes?
But it's not for nothing that Williams and Twitter have become the darling of Silicon Valley. Twitter is a favored way to share thoughts, observations and snippets of information, and even has celebrity endorsements—Shaquille O'Neal signed up in 2008. (Follow him at http://twitter.com/THE_REAL_SHAQ.) More importantly, it's become, in the words of investor Roger Ehrenberg, an "enabling platform," a way for people to easily and quickly rally around a common interest or topic. This is true even for sudden and unpredictable events. After the Chengdu earthquake in May, the writer and tech enthusiast Robert Scoble used Twitter to organize news coming out of China, and claims to have shared on-the-scene reports an hour before CNN even started talking about the disaster.
Because Williams decided early on to keep Twitter open and let outside programmers develop applications based on it, there's been a torrent of Twitter-related creativity. StockTwits, one of Ehrenberg's investments, lets finance fanatics hear what other traders think about a particular company, investment idea, or stock market move. And, just as during the Chengdu earthquake, the information flows in real time—an obvious benefit when you're trying to figure out where the Dow is headed.
You can expect more narrowly focused add-ons like StockTwits in 2009, which will transform the way enthusiasts share information about their passions. Williams's challenge for the year will be to figure out a way to channel all this enthusiasm into a business model. He reportedly turned down a $500 million offer from Facebook earlier this year—a bold move indicating he's got big plans for the 31-person company. He's hinted that advertising won't be the way forward, saying he wants revenues to be "product-based," whatever that means. (One guess is that he'll start selling a secure, private version of the service to companies.) No matter what he decides, it had better be an idea simple enough to convey in 140 characters or less.
Media companies have hardly embraced placing their video and audio content on the Internet. The relationship has mostly been fought out in the courts—think Napster, Grokster and, most recently, Viacom's $1 billion lawsuit against YouTube for "massive intentional copyright infringement" that is still making its way through the courts.
Enter Kilar, the young chief executive of Hulu.com. Hulu started life as a joint venture between NBC Universal and News Corp. Top executives at both companies were frustrated by the swiftly growing world of online video, which (illegally) helped itself to their shows and movies. They wanted to capitalize on the stampede toward Web-based video without falling under its hooves. Kilar, a top executive at Amazon.com, joined the startup in June 2007. He quickly assembled an engineering team and, after just nine months, unveiled Hulu to the public.
With its clean, intuitive interface—one design principle was that "my mom had to get it in 15 seconds or less," Kilar has said—Hulu has been a hit with viewers, who get legal access to a swiftly expanding roster of popular shows like "30 Rock" and "Family Guy." But Kilar's real success has been in getting those same media executives who once sicced their lawyers on YouTube comfortable enough with the Wild, Wild Web to post their hottest shows online. Money talks: though Hulu does the grunt work, the studio behind the show gets the largest slice of advertising revenue.
Hulu was originally heralded as a "YouTube killer," but what has emerged is that even though both are video sites, they're so different in focus they can barely be considered competitors. YouTube is far and away the more popular of the two, streaming 5 billion videos in October—Hulu showed less than 1/20th as many—but YouTube has found its niche as a distribution arm for outlets like CBS News and the Associated Press that want their videos on the channel and incorporated in amateur, user-generated content. All of Hulu's shows are professionally made.
Advertisers prefer the latter, and though neither company reports its earnings, analysts think Hulu could surpass YouTube in revenues this year. YouTube, which is owned by Google, has struggled to profit from the ad strategy that made its parent company rich, where relatively unobtrusive text and banner ads are placed next to relevant content. Hulu's videos, on the other hand, attract audiences already accustomed to watching full-length commercials and other annoying-yet-lucrative forms of advertising. That puts Hulu at the forefront of the online advertising world, which is still experiencing growing pains. Kilar wants online advertising to be less of a punishment, so Hulu is continuously testing new formats. Already, viewers can vote on ads they love or hate, choose to watch a movie trailer instead of a traditional commercial, or opt for a single long ad instead of several shorter ones. Hulu's in-house creative team is even working with advertisers to create entertaining commercials that tell stories over several breaks. After making the Internet acceptable to media barons, Kilar might accomplish the truly impossible: making advertisements acceptable to audiences.
Facebook's chief operating officer is used to success. After earning top honors at Harvard Business School, Sandberg became a close confidante of Larry Summers while he served as Treasury secretary under President Bill Clinton. She went on to make millions as a top executive at Google, where she built up the search giant's global advertising operations. Her arrival at Facebook in March of this year was heralded as a coup—Google's stock price fell nearly five percent upon the announcement, and it was seen as a sign that Facebook was finally "growing up."
Will success follow her to Facebook? Before her arrival, the company experienced some well-publicized disasters, most notably the backlash against Beacon, an advertising innovation that shared your activities on sites like Fandango or Digg with your Facebook friends. Users considered it a privacy nightmare, and Facebook quickly killed it.
The company's latest feature, Facebook Connect, is even more ambitious. It hopes to make your Facebook profile the nucleus of your online existence. With Facebook Connect, you can log onto sites like Hulu, Digg, and popular blogs using your Facebook credentials. Users can adjust their privacy settings at Facebook and have the changes ripple across the Web, or at least to all the parts of it using Facebook Connect.
Partner sites like Facebook Connect because they get to take a peek at your profile, giving them more information about who's visiting; they may also have an easier time attracting new users who won't have to go through the onerous step of creating new profiles. But the real winner is Facebook, which now can find out what users are doing across the whole of the Web. As one commentator put it, "Facebook is about to become the Internet." And the more Sandberg & Co. know about you, the better they can target advertising to you. That is ultimately how Sandberg's success or failure will be judged: on whether Facebook becomes an advertising juggernaut on par with her former employer.