Big or Bullshit: Widgets

Here’s the first of the Big or Bullshit series of posts that I’m doing with Brad Feld.

Newsweek recently suggested that 2007 may be the year of the widget. There’s lots of discussion about widgets going on in the blogosphere, widget platforms are popping up all over the place, and WidgetBox (one of the leaders and one I like) is now reporting that the “widgetsphere” (a-hem) is growing at more than 50% per month.

Widgets generally aim to do accomplish one or more of the following things: 1) improve the functionality of a site, 2) act as leaders for e-commerce or other transactions, and/or 3) promote and lead traffic to the site serving the widget. Read any popular blog and you’ll probably see widgets acting in these roles.

People are asking the question: “Do widgets have a monetization strategy that can really work?” I think too many people are looking for a “direct” monetization strategy here. To me, a widget is often just a functional ad often operating out on the long tail. The approach here is clear – provide something useful to the publisher so they’ll go out of their way to place your brand all over their property. It’s like sticking a billboard in my front yard. I’m never going to do it unless I get something out of it. But that something doesn’t have to be direct and immediate, or even necessarily quantifiable. There are many strategies for the widget economy being tested today, including micropayments for functionality, lead generation revenue shares, sponsorship, etc. I think we’ll learn more about which strategies work and which don’t this year. So far the widgets that seem to be working are just those that do something for me, so I don’t mind doing something for them. That’s the very spirit of the web at work. Looking at it from an economic standpoint, I’m trading ad space for my own cost savings (not having to develop use capabilities myself).

Some people think widgets are destroying the web. The argument is that as people post widgets from servers that are overloaded or just too slow, then every page starts to render too slowly as they wait on these third party servers. I don’t buy that argument. I think people will learn not to use crappy widgets, just like they learned not to use crappy ad servers. It’s self correcting. If they don’t learn, they’ll die too as people just stop coming back. If you think about it, the nature of a widget is very similar to that of an ad – they’re both served up by somebody other than the publisher you came to visit. Nobody serves up ads from crappy little ad servers any more (they used to).

What’s really going on here is that the web is becoming more decentralized and at the same time more personalized. We’re experiencing the web through the eyes of those we trust, and therefore through the widgets they choose.

Take FeedBurner for example – they don’t want you to sit on their web site and read feeds. They are enabling capability (and ultimately an ad network) by sitting in the middle of publishers and subscribers. Take their Headline Animator as an example. Bloggers love this, because it’s a simple brandable way to distribute their feed to potential subscribers via email or their related web sites. Here’s mine, which I haven’t bothered to customize:

Headlines - Colorado Startups

If you’re on the web site, you can also see Lijit’s wijit which enables you to search my personal network, ClickCaster’s podcast widget embedded in my shownotes, SonicSwap’s widget which shows you what I was most recently listening to via iTunes, MyBlogLog’s popular recent visitors widget, and some random posts from the Colorado Startups job board. In fact, I selected the JobCoin job board over Job-a-matic mostly because they had widgets that I could use the way I wanted to use them on my site.

The biggest reason that widgets will be big is simply because users love them. Publishers love them because they save time, promote their mission, or are just plain cool. End users love them because they make the web more functional – even the smallest of publishers can pull off some pretty neat tricks on their sites.

Verdict: Widgets will be Big. They’re content with all the same benefits to the creator as ads. They’ll literally be everywhere. Widgets, RSS, and other technologies are being mashed up left and right, thereby accelerating the decentralization of the web. As more and more of the web is experienced through the portals of our choosing, widgets will help us focus on the microchunks of content that we actually care about.

Watch Brad’s blog for his take on widgets soon.

file under: Blog, Startups