Social Media Will Change Your Business

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The innovation that sends blogs zinging into the mainstream is RSS, or Really Simple Syndication. Five years ago, a blogger named Dave Winer, working with software originally developed by Netscape, created an easy-to-use system to turn blogs, or even specific postings, into Web feeds. With this system, a user could subscribe to certain blogs, or to key words, and then have all the relevant items land at a single destination. These personalized Web pages bring together the music and video the user signs up for, in addition to news. They're called "aggregators." Aggregators turned out to be powerhouses in their own right, just not the ones we expected. Google Reader turned into a staple for many bloggers. But lots of other types of aggregation popped up, much of it associated with different types of social media. At Digg and YouTube and MySpace, for example, people pull apart bits and pieces of information and put them together in ways that suit themselves. In this sense, everyone can be an "aggregator," and growing numbers of us are. For now, only about 5% of Internet users have set them up. But that number's sure to rise as Yahoo and Microsoft plug them.

In time, aggregators could turn the Web on its head. Why? They discourage surfing as users increasingly just wait for interesting items to drop onto their page or e-mailbox. Internet advertising, which traditionally counts on page views and clicks, could be thrown for a loop. Already Yahoo is packaging ads on the feeds. Google is testing the waters.

But here's the really insidious part. If you set up your own aggregator page, such as my.yahoo.com, and subscribe to feeds, you soon discover that blog and mainstream postings mingle side by side. Feeds zip through the walls between blogs and the rest of the information world. Blog posts are becoming just part of the mix, swimming on the same page with the Associated Press, and yes, BusinessWeek.

Winer also ushered in a second tech breakthrough, podcasting. We missed the corporate mammoth that was just about to amble into podcasting: Apple. Podcasting pioneer Tony Kahn, producer of Morning Stories, says that podcasting grew from 2,000 to 5,000 downloads a week to 340,000 a week after Apple's iTunes incorporated podcasts in 2005. After that wave of podcasting euphoria, it's scaled back to a healthy 150,000 downloads a month. The downside? It doesn't make money. A back-and-forth between Winer and Adam Curry, a blogger and former MTV host, led last year to a system that easily distributes audio files. Looking for National Public Radio's On the Media or the latest ska compilations from a disk jockey in Trinidad? Sign up on a Web page, and the program gets automatically delivered to you—as an audio feed. Last summer, Curry created software called iPodder so these MP3s could hitch a ride on an iPod (AAPL). That was the birth of podcasting: radio programming whenever and wherever you want it. Since then, some 5,000 podcasting shows have sprouted up. They cover everything from yoga to the blues.

It's an overnight sensation. Before podcasting, only about 150 people a month bothered to download the audio files of Morning Stories, a show on Boston's public station WGBH. After the station switched to podcasting in October? Eighty thousand. Chalk it up to the bloggers. They pushed podcasting to their own circles, and it grew from there. Even with the power of Apple behind it, podcasting really hasn't lived up to its potential as widespread community-produced radio. It turned out to be too technical for many to use, and too hard for most people to find good content. Many of the most popular podcasts are produced by pros, like those at NPR. Still, the audience is nothing to sneeze at. Research company eMarketer reckons the market for podcasts in the U.S. was 18.5 million people in 2007, and will reach 28 million in 2008. Advertising revenue for podcasts totaled $165 million last year.

11:48 p.m. One more idea. Think of TiVo (TIVO), think of the iPod. When you're using one of them, do you consider the company that provides the programming? CBS, for example? Not much. You're putting together your own package. The pieces come from lots of companies and artists. Often you don't even know where.

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