Information Week’s Mitch Wagner posts an excellent question to the internet community. Are there any examples of a company fighting piracy and launching lawsuits as a successful business strategy?

Wagner has several examples of the opposite; where lawsuits only alienate customers. He begins with Hasbro’s recent takedown of the popular Scrabulous game on Facebook to launched its own unpopular Scrabble game, coving the music industry and Garfield.  Matt Mason’s “The Pirate’s Dilemma” is a book length list of examples of lawsuits hurting businesses.

There are even examples of companies embracing piracy to improve their businesses.

So does anyone have an example of lawsuits helping companies?

[Via Techdirt]

Any web 2.0 business model must, by law, include five or more buzz words from user-generated content to API to social networking to get venture funding.  Companies are desperately trying to use social media like Facebook, Second Life, and even the iPhone to manufacture marketing and attention. The result is start-ups and established companies focusing resources because that’s where the hype is rather than where the smart business is.

Hype is the keyword here.  An already popular company like Facebook or Apple launch something new and obviously there’s hype.  But this hype is not contagious.  A former boss of mine said the reason we were developing an iPhone app before we had a mobile site was to “Get some attention when the app store launches.”

For start-ups limited in resources, jumping on the internet bandwagon is more often a waste and at best a distraction.  It’s best to focus on building your own features and worth to make sure once people find you, they want to stay.  Building applications for other platforms fragments your audience and time - what you build on Facebook needs to be rebuilt for the iPhone and rebuilt for Netvibes.

Second Life has become a prime example of hype overblowing marketing potential.  Last year, just as another company I worked for wanted to build a Second Life presence, Wired wrote about the marketing waste the virtual world had become. Coca-Cola, Reebok, IBM, Sears, and dozens more build huge islands with style and zazz, paying high-profile Second Life consultants and expecting the viral marketing to take off.  But no one visited.  The hype came from companies trying out Second Life, but no one ever posting resulting.  Since Second Life accounts are free, the 4 million users it boasts is misleading.  Only 1 million had logged on in the past 30 days and only a third of that in the past week.  Only 100,000 of those live in the U.S.  Those who do sign on spend most of their time in sex shops or gambling, not looking at marketing campaigns.

Facebook is likely to follow. Facebook itself is having trouble monetizing its massive user base, how do third parties expect to do better?  iPhone applications can be sold for money, which makes them less viral.  And working with any closed platform like Facebook or Apple puts the platform in control of your future.  Facebook suddenly blocked some of its most popular applications, Top Friends, Super Wall, and Social Me, with little notice and challenges to get back in the platforms good graces.

The opposite strategy of releasing your own API is more worth the time (if it makes sense for your product and not just a buzz word for investors) but has its own risks.  Twitter’s success and constant downtime are both due to their API.  Without the API, much of the sites usefulness wouldn’t have happened leading so many to join.  But because of the API’s popularity, the site can barely keep basic features operational.

So this is a lot of don’t.  The dos, unfortunately, are the hardest because it needs to be case-by-case.  Because there are so many platforms and APIs and doodads to try and sync up with, it’s impossible to say everyone should do this.  The key is when deciding how you want your product to integrate with the greater web world, think about your own strength and goals rather than bullet list features.  Everyone is pushing the same bullet lists.  You’ll stand out more by not.

I’m a big fan of instant messaging - I find it the most efficient communication tool. It’s instant (obviously), share files and links, and I can do other things at the same time (which is harder on the phone). I’ve always over analyzed proper manners when IMing someone, and just when I’m getting the hang of it, Facebook comes along and messes up the whole rules system.

Facebook released their own instant messaging service two months ago, built into its social network, meaning if you have a Facebook account, you have Facebook IM. Unlike AIM or Google Talk, you just have to sign into Facebook and all your also signed in friends are shown as available in a taskbar. There’s no need to trade addresses, it’s all simple and automatic.

As a result, I don’t know who wants to use it and who doesn’t, making it hard to know who to IM and when.

Facebook Chat comes readily available on Digsby, my favorite IM client, so I can use the service just like any other instant messenger. Most of my friends use the taskbar on Facebook pages, requiring they keep the page open so as not to sign off. It also makes it hard to see when you get a new IM since your browser doesn’t flash announcing the new message. I’ve often tried sending messages to people who never saw them - they just closed their browser.

Thus even friends I ask about IMing miss IMs. And people I didn’t check with in advance is such a crap shoot - I never know if they saw my IMs and were so offended they ignored me, or if they just never saw them. That’s very stressful on my fragile social psyche.

The other challenge with Facebook Chat is simply knowing who you want to talk to. I have so many friends from high school, camp, and college that I lost touch with on purpose, not to mention the people I’m friends with just because. All these people show up on my friends list. I don’t necessarily want to de-friend them, but I certainly don’t want to talk to them. At least on Facebook they were buried with the other faceless faced masses. On Facebook Chat, I have a constant list (Facebook says they are working on this feature). Unfortunately, not being able to block specific people leads to people IMing me I don’t want to talk to. And since I use an IM client, I always see the IM.

Facebook Chat is still young. Hopefully as more people discover its features and value, it will become a great way of connecting with people, above poking them (which is still fun). But until Facebook Chat becomes valuable, we all need to learn how to use it. Starting with answering your IMs.

I updated my Twitter status which, through TwitterSync, updated my Facebook status. Facebook, in turn, updated my FriendFeed with that status, but Twitter already updated FriendFeed. Suddenly I realized data portability is closer than we think.

A few weeks ago I wrote about the Info Wars brewing between the social networks on their desire to control our information. MySpace, Facebook, and Google launched their own social networking networking service, allowing users and 3rd-parties to access information inside each walled garden. Facebook quickly blocked Google’s service claiming privacy issues, an attempt to protect its users.

Facebook forgot its API already allows an immense amount of access to user information. Many leading social sites offer APIs, or application programming interfaces, that allow other sites to integrate each other’s systems. Facebook, for all the criticism of its walled garden mentality, is able to import data from many sites and external sites, like FriendFeed, can have data exported. I can’t move all my friends from one site to another…yet. But smaller social networks like Twitter are almost completely functional without ever going to Twitter.com.

The dream is control our content. Now we can just manipulate it. It’s a start. And competition, from new and old and in between social networks will force more open standards that make every site more valuable to users.

The most talked about new web 2.0 sites, from Facebook to Twitter, are facing business model challenges. Scott Karp points out the challenge of print advertising online while Alexander van Elsas goes farther in his post “Advertisement holds web 2.0 in a death grip.”

Web 2.0 has focused on free services - free services that build virally fast and then, hopefully lead to a business model when the venture capitalists get impatient. But banner ads and tier subscriptions aren’t enough.

Advertising, as Karp and van Elsas point out, isn’t useful. Google pioneered ads that use your search terms so they are relevant and unobtrusive, whereas the only thing Facebook can sell me are gay dating sites (Google advertises better ones). The challenge isn’t simply advertising isn’t working, but that you can’t charge people for your services.

Most web services offer a paid option with valuable features. Remember the Milk charges $25 a year just to sync my tasks to my phone. Yahoo Mail wants another $20 to give my email portability. Each service doesn’t cost too much, but add them up, and suddenly the internet got expensive.

Bernard Lunn says social networking “is at a major fork in the road” (leading to web 3.0?) where they have to choose between walled gardened, open APIs, or mix. All the free on the web will need a business model, and every site from social to content providers will find charging customers harder and harder and advertising spread thinner and thinner.

Google’s strength came from reinventing advertising to its strength - search - creating a unique model that let companies and individuals advertise without upfront costs. Amazon and eBay have built retail businesses that couldn’t exist in brick and mortar stores. Most other sites have relied on 7-8 figure buyouts to make money.

Other websites will need to find new business models. Some ideas like market research and statistics, like I discussed for Facebook and other social networks, make excellent use of their large user bases, but will lead to a decrease in value when every social site starts offering this research. Further, with open source and APIs all the rage, regular pageviews will become less reliable as people use services how they want, not how the websites want them to. For example, advertising will work even less for content providers once RSS readers takeover the mainstream.

This is a lot of doomsaying without many solutions. I think sponsorships and product placement has potential, but again, it’s going to be impossible to control users. The best business models thus far have been enterprise level customer service, best seen in companies like Red Hat which provides customized Linux solutions and and MySQL’s Enterprise Unlimited. Companies will pay for customized services and research which individuals have no use for. Less than one percent of MySQL’s customers pay, but that was enough for Sun to pay $1 billion to buy the company.

The focus over the next few years needs to be on developing new and hopefully revolutionary business models that recognize the internet, software, and content want to be free (yes, even music and movies). The old business models required payment, but the future doesn’t have to be constrained by old-fashioned thinking. Think outside the tubes.

The social networking world has been all a buzz. First MySpace announced their Data Portability to allow some sites access to MySpace user information. Then Facebook releases Connect to share its users. The Google quickly unleashed Friend Connect to try to share everything. Facebook was having none of this. They blocked Google’s Friend Connect access in the name of privacy.

And let the Info Wars begin. The winner will own your data and you’ll be lucky if you have a choice.

Maybe I’m hyping this a little much, but the truth is user information is to the internet what oil is to the Middle East. Advertising has its place, but slowly websites, especially social networking sites, are learning their user information is the most valuable resource.

That’s why Facebook wants to block Google. Whoever controls the user info will control the internet.

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How did you discover that new web game or hilarious video? Between social bookmarking, social networking, socializing, the internet has made sharing information and ideas as simple as pointing and clicking. So do we need anointed trend setters anymore? Two conflicting theories are hashing out the marketing debate, but both forget to give credit to the real influencer - the internet. The internet has flattened the playing field for anybody to contribute to starting or spreading a trend.

Marketing conventional wisdom has followed the teachings of books like The Tipping Point by Malcolm Gladwell and The Influentials by Jon Berry and Ed Keller. These books claim a few well connected individuals inspire the vast majority in terms of the clothing we wear or movies we watch. These people are often called influentials. Marketing companies promote their connection with these influencers and often focus advertising budgets strictly to reaching this oligarchy of culture.

New research is challenging this conventional wisdom. Clive Thompson writes for Fast Company about Duncan Watts research on social trends.

[Duncan Watts] has analyzed email patterns and found that highly connected people are not, in fact, crucial social hubs. He has written computer models of rumor spreading and found that your average slob is just as likely as a well-connected person to start a huge new trend. And last year, Watts demonstrated that even the breakout success of a hot new pop band might be nearly random. Any attempt to engineer success through Influentials, he argues, is almost certainly doomed to failure.

“It just doesn’t work,” Watts says. “A rare bunch of cool people just don’t have that power. And when you test the way marketers say the world works, it falls apart. There’s no there there.”

Watts theorizes trends are more random, or at least harder to track. All the research done on trends has looked at successful trends. Trends that failed to catch on are harder to study. Watts computer simulations give more credit broader social networks, meaning marketing to a larger group is more important than a select group. Simply, if more people know about your product or idea, the odds are more likely someone will share that information.

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