Google turns whole web into social network December 9, 2008

Google turns whole web into social network

By: Vincent Maher

It was just a matter of time before Google started to leverage the massive base of Google accounts to connect everyone together. As usual, this new Google project is ambitious – instead of creating a new social network as a destination site, the new Friend Connect service takes the network to where the people already are – on blogs and websites.

Friend Connect (www.google.com/friendconnect) comes in the form of a sidebar for websites and blogs that has a powerful viral invitation tool for getting people to join and become part of a community that centres around the content of the site. Website creators and bloggers can invite new community members from a list of Gmail contacts or share the site inside other social networks such as Facebook, MySpace etc.

The genius of it is its simplicity – much like the paradigm-shift brought about by Google’s Adsense – Friend Connect explodes the notion of social networking completely and enables any website to be a component of a global social network.

How does it work? Website creators log in to FriendConnect using their Gmail accounts, download some code and put it on the site. Once this is done, there are several gadgets that can be embedded into the site to enhance the community aspect once people have joined your network:

• a wall gadget so people can post videos, comments and other bits of social lint onto your site;
• a review gadget so people can discuss how cool or lame you are depending on their mood, and,
• most importantly, an OpenSocial gadget that allows you to embed OpenSocial applications inside your site.

The scale of it is grand, like the Israelites toppling the walls of Jericho with their trumpets, or the rumble of elephants and infantry descending upon the Rhône.

Forget the social network as a walled garden, forget social networks as destination sites – FriendConnect turns the whole web into a social network.

Jeff Palumbo—

The great social network debate is unified profiles -vs- singular social networks. Googles friendconnect is a giant leap for the unified profile. Under the unified profile we will see profiles connected to one another in a more conventional life fashion with out or with little reprensentation of where the profile was created. Under the social network side we have a community for bikers, schools, charities, etc. as one community that you and your profile are a part of. This is a great method for many community types such as an independent private school, a church or a charity where belonging to that community means more than belonging to a website like bed bath and beyond.

This relates to many businesses. How can I leverage my social initivitave with in this great debate. If your company is seeking the relestate of the profile you need to be an application or widget. If you company seeks the verticle community you need your own social network. Which is better? They both serve their purpose and hold value to the respective business that uses them. The unified profile allows the profile owner to dictate the content on their profile. The community allows an enclosed colaboration between people under a percieved community.

Friendster Receives Patent on Compatibility Scoring of Online Social Network Users December 9, 2008

MOUNTAIN VIEW, Calif., Dec 09, 2008 /PRNewswire via COMTEX/ — Friendster, Inc., a top 20 global website based on traffic and the #1 social network in Asia, today announced that the U.S. Patent and Trademark Office has awarded the social networking pioneer a new U.S. Patent, titled “Compatibility Scoring of Users in a Social Network” (U.S. Patent No. 7,451,161). Friendster has been granted four patents since July 2006, validating the company’s early and continuous innovation in online social networking.

Friendster’s latest patent, granted on November 11, 2008, describes a unique methodology used to calculate compatibility based on expressed interests between users of a social network. This includes scoring the compatibility between two members of a social network based on their interests and scoring the correlation between two interests for a given member of a social network.

“In just six years, social networking has become both an industry — since 8 of the top 20 largest websites in the world are social networks — and a critical platform for over half a billion Internet users globally to share, communicate, connect and be entertained with existing and new friends, family and colleagues,” said Richard Kimber, chief executive officer of Friendster. “A core component of the evolution of social networks is the ability of the online ’social graph’ to represent our real social life. Understanding the common interests between people establishes common ground to build and enhance relationships.”

Prior to this most recent fourth patent, Friendster was granted three social networking patents in 2006 and 2007:

— In July 2006, Friendster was awarded its first U.S. patent describing how people are connected in the context of an online social network, titled “A System, Method and Apparatus for Connecting Users in an Online Computer System Based on Their Relationships within Social Networks” (U.S. Patent No. 7,069,308).

— Friendster was granted a second U.S. patent in October 2006, which discloses the process of enriching other users’ profiles with text, video, pictures and additional content, titled “Method of Inducing Content Uploads in a Social Network” (U.S. Patent No. 7,117,254).

— In March 2007, Friendster added another patent to its portfolio, titled “System and Method for Managing Connections in an Online Social Network” (U.S. Patent No. 7,188,153 B2), which describes a technology that allows members of a social network to manage their connections by, for example, adding friends; personalizing their network through arranging, ordering and classifying connections made in an online community; and managing these connections at will.

“Since launching the first social network in 2002, Friendster has continued to build and own a significant patent portfolio. Friendster’s four patents address many fundamentals of social networking — establishing connections, distributing and sharing content, managing connections over time and assessing compatibility between users. Friendster’s patent portfolio is one of several assets of the company. Friendster anticipates receiving more patents, and we will continue to focus on growing our large global business into an even larger one,” said Kimber.

Friendster Leads in Asia and is a Top 20 Global Website

Friendster is the #1 social network in Asia, with over 65 million registered users and over 50 million monthly unique visitors from Asia.* In Asia, Friendster has more monthly unique visitors than any other social network. Plus, Asia is the largest market of Internet users (Asia has 41% of the world’s Internet users while the U.S. has only 19%), and Asia is the fastest growing region in the world.** Friendster has a loyal and growing user base throughout Asia in the following top 10 countries for Friendster: Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore and South Korea.

Friendster is a top 20 global website in the world in terms of traffic, serving over 18 billion page views a month.** Friendster is 1st in “user engagement” among the top five global social networks, with users spending an average of 187 minutes per visitor per month on http://www.friendster.com.**

About Friendster

With more than 90 million members worldwide, Friendster is a leading global online social network. Friendster is focused on helping people stay in touch with friends and discover new people and things that are important to them. Online adults, 18 and up, choose Friendster to connect with friends, family, school, social groups, activities and interests. Friendster prides itself in delivering an easy-to-use, friendly and interactive environment where users can easily connect with anyone around the world via http://www.friendster.com or m.friendster.com from any Internet-ready mobile device. Friendster has a growing portfolio of patents granted to the company on social networking, with more expected over the next several months. Headquartered in Mountain View, California, Friendster is backed by Kleiner Perkins Caufield & Byers, Benchmark Capital, DAG Ventures, IDG Ventures and individual investors. For more information, visit: http://www.friendster.com.

*Google Analytics and Friendster Internal Data, September 2008

**comScore Media Metrix, Asia Pacific and Worldwide Data, September 2008

SOURCE Friendster, Inc.

 http://www.friendster.com

Social Networks Emerging as New Charity Fundraising Platforms November 20, 2008

Related Links Hulu’s Revenue To Rival YouTube’s By 2009 Google Launches Integrated Gmail Video and Voice Chat Oracle Gets Buzz Around Beehive Enterprise 2.0 Announcement Search Industry Transforms In Face of Internet Changes

“We’ve seen social media can be used to bring people together for all sorts of reasons; I really hope we can bring people together to do good,” said Anthony Berkman, president of BlogCatalog.com, a social blog directory on the Internet, as he launched a social awareness campaign to benefit DonorsChoose.org on May 28.

“Even better, this is a chance to find common interests within BlogCatalog.com and across the Web,” he added.

The campaign asked directory members (bloggers) to write about DonorsChoose.org and raise funds for the non-profit organization. DonorsChoose.org is a non-profit Web site that brings teachers and donors together to fund specific student projects that range from “Magical Math Centers” to “Cooking Across the Curriculum”. Any individual can search teacher proposals and fund specific projects, which are tax deductible.

“Internet social networks from MySpace to Facebook are receiving a ton of media and Internet attention, but we have yet to see an online social community come together to raise funds for a good cause,” said Anthony Berkman, president of BlogCatalog.com. “We see this as an opportunity to empower and recognize bloggers to collectively focus their blogs for good.”  

Berkman’s idea is to challenge directory members to draw attention to and raise funds for this underserved non-profit organization. BlogCatalog.com has set a goal to raise at least $25,000 for DonorsChoose.org, which is a member of the Omidyar Network.

The Omidyar Network is a mission-based organization established by eBay founder Pierre Omidyar and his wife, Pam (pictured above). Berkman said depending on the success of the challenge, BlogCatalog.com will develop a community service page to host and promote more blog events in the near future. All donations made to DonorsChoose.Org will credit the blogger.

Charity Badge: Using the Power of Social Networking for Good November 20, 2008

Yahoo has come up with a way to mix social networking with charities and non-profits. Called Yahoo! For Good, it has partnered with ‘charity aggregator’ Network for Good and launched a personalized Charity Badge – for people to put on their websites, social networks or email. To promote the initiative, Yahoo! will match the amount raised by the user who generates the largest number of individual donations from their personal social network (up to $50,000).

The Charity Badge works by allowing website owners or social network users to create and publish a personalized badge (essentially a widget). You can even put it on your email signature. With the badge you can set up a link to your favorite charity, so that family, friends and others in your social network can donate as well. Or you can simply copy the code for an existing badge, that someone else set up for a charity. Check out the top 10 badges to get an idea of how this works.

There are even some stats to back up the campaign:

“According to recent studies, consumers value the personal advice of friends, family and acquaintances 1.5 more times today than in the 1970s and twice as much as traditional media (1). A staggering 61 percent of people surveyed report giving to a charity because a personal connection has asked them to make a contribution (2).”
(1) Source: The Influentials
(2) Source: Harris Interactive

Rather than set up my own badge, I chose an existing badge for a worthy cause: Global Exchange. Here it is below and I’ve also added it to R/WW’s sidebar. If you feel like donating, click the orange ‘Donate’ button in the badge.

Word-of-Mouth, the Most Important Brand Communication Vehicle November 20, 2008

It’s All About W-O-M
According to the study State of the Brand Report by the American Marketing Association and Luth Research and MiresBall, Word-of-Mouth is the most important marketing tactic for brand communication. In Brand Week’s January 22, 2007 issue, Kenneth Hein’s article “Study: Freshen It Up To Keep Sales Hot” reports:

As for marketing tactics, Web and interactive initiatives were deemed the most valuable for brand communication behind only word-of-mouth. Still, despite ranking 13th in terms of importance, broadcast advertising ranked No. 1 in terms of spend, largely because it’s considered one of the best media for driving awareness.

The Most Important Brand Communication Vehicles
Below is the list of most important brand communication vehicles, ranked in order (Source: State of the Brand Report)

1. Word-of-mouth
2. Web and interactive
3. Customer service
4. Public relations
5. Print advertising
6. Internal communications
7. Corporate communications
8. Promotional events
9. Co-marketing
10. Community and affinity groups
11. Direct mail
12. Sponsorships
13. Broadcast advertising
14. Packaging and POP
15. Outdoor advertising

Recommended W-O-M Business Books
I guess it’s time for all front line marketing knowledge workers, middle managers, and C-Levels to take a deep dive into word-of-mouth so you can add this to your marketing tactics toolkit. Entrepreneurs should also take W-O-M to heart.

Useful business books for your deep dive are: Word of Mouth Marketing: How Smart Companies Get People Talking by Andy Sernovitz, Buzzmarketing: Get People to Talk About Your Stuff by Mark Hughes, or The Anatomy of Buzz: How to Create Word of Mouth Marketing by Emanuel Rosen.

P.S. Check out the Brand Week article. The main focus is on “brand revitalization,” which was very interesting. Apparently, brand revitalization should be done every three to five years, according the State of the Brand report.

Building a Brand with Widgets November 20, 2008

The customizable bits of software on Facebook and other social networking sites are the latest trend in viral marketing. But are widgets here to stay?

CEO Guide to Widgets

• Building a Brand with Widgets
• Why Widgets Don’t Work
• Widgets: The Future of Online Ads
• A Widget Mogul in Between Classes
• When Facebook Ads Flop
• The CEO Guide to Widgets
• Making Money from Widgets

• View Slide Show

The cards were stacked against A&E Television Network as it tried to generate positive buzz about its new series, Parking Wars. For one, it’s a reality show about meter readers. Two, the show doesn’t feature celebrities. “We thought if we could find a clever way of increasing consumer interaction with the concept behind the show that we would increase curiosity in the show itself,” says Lori Peterzell, A&E’s vice-president for consumer marketing.

So A&E hired area/code, a multimedia game developer, to build an online game based on Parking Wars. Played on the social network Facebook, the game has users park virtual cars on friends’ profile pages, or “streets,” while slapping tickets on cars parked on their own page and avoiding tickets themselves.

Grand Theft Auto it’s not. What makes Parking Wars unique is how it’s distributed. The game is passed from one person to the next by way of widgets, small bundles of software that users can download, customize, and forward to a single pal or an entire contact list with the click of a mouse. Widgets like Parking Wars, which are designed for a specific social networking site, are typically referred to as applications. Since its Dec. 17 introduction, Parking Wars has attracted more than 198,000 unique users, many of them repeat players, and generated more than 45 million page views.

Raising Brand Awareness

“It’s surpassing our expectations,” Peterzell says. A growing number of companies hope they’ll be wowed by widgets, too. Electronic Arts (ERTS), Viacom’s (VIA) Paramount Pictures, Sony Pictures, Gap (GPS), Hewlett-Packard (HPQ), Hallmark, and Blockbuster (BBI) are among the businesses hoping to spread a marketing message or raise brand awareness through these modules of content used by millions of social network users to customize profiles or communicate with friends.

Interest in widgets is rising as marketers become disaffected by other methods of online advertising, especially on social networks. Google (GOOG) executives said in January they’re not generating as much revenue as expected (BusinessWeek.com, 1/31/08) from placing ads on News Corp.’s (NWS) MySpace.

Some marketers say widgets may do a better job engaging users than, say, so-called banner ads emblazoned across the sides of social network profiles. “Content and functionality are the new creativity—it’s not about whether you have a whiz-bang rich media banner running,” says Andy Bateman, CEO of brand consultancy Interbrand New York. “Are you doing something that’s actually helpful and useful to people?”

Some Facebook Campaigns Have Fizzled

There’s plenty of anecdotal success. Sony Pictures promoted its Resident Evil zombie flick by running a sweepstakes in conjunction with Rock You’s popular Zombies application, which lets people send virtual zombies to bite their friends. Sony Pictures had hoped 10,000 people would sign up for its contest, and instead got 1 million takers, says RockYou CEO Lance Tokuda.

Social Media Meets Local Search November 20, 2008

 

By Gregg Stewart, Search Engine Watch, Mar 7, 2008

Social network traffic continues to increase at a dramatic rate. To date, however, these sites have had a challenge in leveraging this traffic into revenue and ad platforms. Evidence of this can be seen in Facebook’s decision to hire Sheryl Sandberg to assist CEO, Mark Zuckerberg with expanding and monetizing Facebook’s growth.

In past articles we’ve explored the importance of user reviews and ratings as an entry-level strategy for utilizing aspects of social media to increase local search selection and preference. Several standalone local search sites focus on the referral and social aspects of local search (examples include yelp.com, Insiderpages.com and Angie’s List). While traffic is growing, these sites are still in the early stages of generating large sales lead/referral volume.

I thought it would be interesting to take a look at emerging local search products/applications on the heavily trafficked social platform/portal sites. So I went out to the two most-used social media sites, MySpace and Facebook, to probe what local search tools were available on these platforms. I searched “Yellow Pages” and “Local Search” on the sites to aid in my exploration.

I was intrigued by the SERP (define) results for these terms on MySpace. In addition to the Google ads, I was presented with several profiles, including one entitled “Welcome to Verizon.” I’m happy to report that Verizon Yellow Pages resides in Athol, Massachusetts, and is a 47-year-old male. All kidding aside, I wonder the value of profile posting like this.

A peek into the MySpace Forums reveals postings similar in nature and organization to the old Usenet groups (define). Boy, do I feel old. And while I could get volumes of information on a host of topics, if I wanted to find information on a local restaurant in my home town or in a major city, I’d go hungry.

Local search hasn’t yet found its way to MySpace. If you want to target their users, look to creative ad units and their classified section for an appropriate category.

Facebook appears to be a little further down the local search development path. There are a couple of applications that support local search for Facebook users:

·         My Yellow Pages

The My Yellow Pages application allows users to rate businesses within a specified geography and to ask friends for recommendations. In testing a number of markets, they appear to have a healthy amount of local business listings and categories supported in the application.

The My Yellow Pages application displays businesses with an average rating and the ability to bookmark and share businesses found. While this is useful, I couldn’t get any further detail on the ratings information. Additionally, few businesses outside of major metropolitan areas received ratings.

·         MojoPages

MojoPages is a Facebook application that appears to be repurposed version of their existing MojoPages.com beta Web site. Tagged as “People Powered Yellow Pages,” MojoPages states they have more than 15 million businesses in their database. Their top markets based on the number of reviews vary from 671 in Tulsa, Oklahoma, to 63 in Carlsbad, California. Based on the listings of the top markets, their area focus appears to center on Southern California.

Ad Models

Unlike standalone IYP/Local search sites, I found no developed ad models for these social media referral directories. So if you’re a local advertiser, it makes sense to ensure your listing information is correct, and work with the user-generated review information.

Why Should You Care?

In July 2007, comScore released a study on social media showing meteoric growth in the segment. Additionally, according to eMarketer, advertisers are continuing to experiment with social network advertising, with $920 million being spent on social networking sites in the U.S. this year and a projected $1.6 billion in 2008. Worldwide, online social network ad spending is expected to grow by 83 percent, to $2.2 billion in 2008 from $1.2 billion this year.

Targeting Local Leads on Social Sites

In addition to ensuring your business information is present in all local directories, reaching consumers on social networking sites requires the local business to be active in the online community by reaching out to others, being involved with posts, and taking more creative steps to find the qualified lead. Could it be worth it? For some, yes. But it’s definitely something that needs to be tested on an case by case basis, as there are no set standards for ROI (define) on these platforms, as of yet.

Once again, social media and user-generated content management is a required element of your comprehensive local search program. Keep your eyes open and check these sites often as local communities, and resources like referral directories, develop quickly.

Future of Giving-Donations-Technology and Charity November 14, 2008

Social Media can truly impact our worlds’ charitable initiatives. It is nice to see tools like sixdegrees.org widgets. These tools are interesting in that they allow a viral way of sharing your passion for charity and raising money. These tools however are no more than a donation tool. Donating alone in the US to charities (27% of all gdonations) is a mere $39 Billion. 50% of all charitable giving is immediately spent to raise more money for the charities. Leaving our country with $19.5 billion in charitable giving to be spent on “the cause” and all other operational expenses. Charitable giving to churches represents 32% of all ($300 Billion) charitable giving in the US. Giving is only a part of the solution. We have seen an increase in Giving year over year but there is only so much to give.

The next generation of “giving” is something that will allow consumers to be empowered to make change through their consumer actions, and drive money from COMMERCE (multiple Trillions available) to charities.

Jeff Palumbo; United Media Partners Inc.

Kevin Bacon, Charity

Untitled November 14, 2008

Title:               Sharing the Widget Wealth

Date:               May 22, 2007

Source:          Business Week

Theme:          “For the makers of applications, widgets are a potential gold mine.”

Author:           Catherine Holahan

________________________________________________

Sharing the Widget Wealth — Widgets jazz up profiles and boost traffic, but eat into social networks’ ad revenue. Facebook and others ponder a remedy

Call them Web page bling. They’re widgets, the shareable programs that let Internet users do everything from display photo slide shows to embed multimedia movie trailers, music, and audio messages. Over the past year or so, millions of Web users have employed widgets to accessorize their pages on social network sites, such as Friendster and Bebo.

For the makers of the applications, widgets are a potential gold mine. Slide, the maker of popular slide show tools, reaches about 50 million viewers a day, says founder and Chief Executive Max Levchin. “These are features for self-expression…that can create very engrossing experiences for users,” he says.

They’re also good for social networks as they help boost site traffic and time spent on a site—actions that advertisers crave. But there is a downside for social networks, too. As widgets incorporate more advertising—such as movie trailers and brand logos within picture players—they can grab attention away from the ads the social networks sell on their pages, making those spaces less valuable and creating competition for the clicks that generate advertising revenue.

So the social networks want their share.

A Widget “Tax”

Several network owners are discussing with widget makers how they can help disseminate and split the revenue from advertiser-supported widgets and widgets that are advertisements themselves, such as movie trailers. RockYou!, a maker of popular widgets including a countdown-to-event widget, is discussing revenue-sharing deals with several social networks, says Chief Executive Lance Tokuda. Similarly, Friendster is open to revenue-sharing opportunities, says Director of Marketing Jeff Roberto. “The social networks will exact some sort of a tax or a revenue split because the widgets live inside the frame of the social network,” says Slide’s Levchin. “There is a huge incentive for MySpace, Facebook, and everyone else to make sure that we stick around.”

Facebook may be taking extra steps to ensure that Slide and its peers stick around. Facebook is considering letting third-party companies, such as widget makers, provide their services on its site, The Wall Street Journal reported on May 21. A Facebook representative declined to comment on the story, instead noting that the company plans to make some announcements at a May 24 event. Facebook reportedly does not plan to share revenue with the widget makers, who believe such revenue splits are only a matter of time.

Does Traffic Trump Payment?

It’s up for debate just how much of a tax social networks deserve. On one level, widgets already give social networks a popularity boost with users. In the five months after Friendster opened its site up to all widgets in August, 2006, it added more than 5 million new users and is now serving more than 200 million pages a day. Roughly 39% of the site’s users have a widget in their profiles, and users with widgets tend to be more active, says Friendster’s Roberto. He adds that the users who continually update and add widgets to their pages—he calls them “content mavens”—draw more users to those pages. “All of those dynamics play up to more activity and more registered users,” says Roberto. “Right after we opened up the site [to widgets] we did see a spike.”

RockYou!’s Tokuda says that his company’s widgets, and those of other widget makers, had a similar effect on Bebo, another popular social network site. “Widget providers increase their traffic because it gives their users more things to do,” says Tokuda, adding that users see widgets as a means of self-expression.

Widget Wave – Bubbling Widget Growth November 14, 2008

Title:               Widget Wave – Bubbling Widget Growth        

Date:               Jan, 2008

Source:          Forbes

Theme:           “Corporations are viewing widgets less as frivolous gadgets, and more as business tools to boost traffic and ad revenue on their sites.”

Author:           Wendy Tanaka

 

 

Widget Wave – Bubbling Widget Growth

Seemingly overnight, everyone is in love with widgets.

Consumers love the tiny software applications that let them share music, photos and videos, and even throw virtual sheep at one another, on social networks. And social networks love widgets because they help boost traffic and ad revenue on their sites.

On Facebook alone, users have installed nearly 13,000 widgets approximately 765 million times, according to Adonomics, a Web site that tracks widgets on the social network. Adonomics estimates the combined value of these widgets to be $374 million. There are also rumors that major media companies, notably News Corp. (nyse: NWS – news - people ), want to add developers to their stable of properties.

As a result, the number of individual hackers and companies that develop widgets has mushroomed to an estimated 100,000 worldwide, begging the question of whether the sector is in a bubble. Industry experts, however, say the concern is misplaced–for now–and that the fast ramp up is no different from what has happened in past generations of software development.

“It’s too early to call it a bubble or a success,” says Ross Levinsohn, the former News Corp. executive who oversaw the company’s celebrated acquisition of MySpace. “You’re really talking about the last six months as the real beginning of the growth of applications. It’s just the beginning of what we’re going to see over the next 12 to 18 months.”

David Weiden, a partner at Khosla Ventures, which has invested in widget companies Slide and iLike, says a modest number of developers–about 20–received venture funding in 2007. He says investors are much more prudent now, and want to avoid the bubble conditions of a decade ago. “If there were widget companies that are public and have no revenue, I would say that’s a financial bubble,” Weiden says.

Slide founder Max Levchin (co-founder Paypal) likens the flurry of activity to the 1980s software-development boom. “It’s very similar to shareware and freeware,” says Levchin, who also co-founded online payment system PayPal. But widget development is a lot faster, he says. “It’s like the 1980s played out in half a year.”

The widget sector kicked into high gear last May when Facebook created an open platform for developers. Google (nasdaq: GOOG – news - people ) followed suit in November, announcing its own platform, OpenSocial. Applications for OpenSocial, however, have not been released yet, and development is said to be slow.

Jia Shen, co-founder of widget company RockYou!, says widget development is similar to Web site development, and thus, widgets are being valued the same way. “The metrics are about reach and not about how much money they’re making,” Shen says.

But unlike the dot-coms of old, many widgets are making money, mostly through advertising. Shen declined to discuss RockYou!’s revenues, but said that widget shops with just a few developers are raking in $80,000 a month in ad revenues.

Shen also says that some widgets have the potential to morph into full-fledged Web sites that can generate even more revenue. “There’s been a lot of criticism of the applications as toys,” he says. “One of our applications was Zombie, a goofy application that lets users ‘bite’ friends virtually. After awhile people got bored with it, so we built it into a full-fledged game with virtual goods.”

Indeed, corporations are viewing widgets less as frivolous gadgets, and more as business tools to boost traffic and ad revenue on their sites. “Six months ago, the thought of someone altering his or her homepage to incorporate someone else’s widget into their brand [was considered] dilutive,” says Jay Adelson, chief executive of social network Digg. “There’s been an acceptance by traditional media that widgets give them some reciprocal benefit. In 2008, you’ll see traditional brands that have controlled every element of their page open up.”

To meet rising demand, developer shops are adding engineers and working round the clock to make new and better widgets. Flixster, which says its movie-review widgets have been installed on Facebook more than 13 million times and is also developing applications for Google’s OpenSocial, has doubled its engineering staff to 12 since November.

But competition for engineering talent is fierce. “Most people have several options,” says Flixster Chief Executive Joe Greenstein. “We pay reasonable salaries and give people generous stock options, but do we have to compete with the relatively high salaries from Google and Yahoo! (nasdaq: YHOO – news - people )? Yes.”

Digg’s Adelson says he has resorted to looking outside Silicon Valley for engineers. “We are trying like mad to hire more engineers,” he says. “It’s really, really hard. I pretty much have to import people from other states.”

Levinsohn, now a partner at venture firm Velocity Interactive Group, says 2008 will be a big year for media-company acquisitions of Web 2.0 companies. In 2007, just a few tiny widget shops were absorbed by bigger ones, such as Slide. “There are a lot of good ideas that could benefit from big media,” Levinsohn says. “You have a lot of companies that hit a wall and can’t get beyond a certain level. They need the infrastructure and distribution of a large company.”

Still, widget developers know they can’t all be winners. “Not all developers will survive,” or get acquired, says Slide’s Levchin. “I can look back to the ’80s playbook and know what’s going to happen.”