• Everyone is reporting the CBS purchase of Last.fm for $280 million (which follows the recent purchase of Wallstrip for $5 million). As an aside, this could be an interesting purchase, particularly with the recent spat between Viacom (also owned by CBS parent National Amusements) and Google’s YouTube – is that a precursor to where CBS intends to leverage Last.fm? Could we soon see a property emerge that streams CBS and Viacom shows, makes recommendations based on your profile and makes the shows available for purchase?
• TechCrunch and GigaOM both claim eBay will confirm the rumored Stumbleupon purchase later today. Despite the blogosphere’s confusion on how Stumbleupon fits eBay’s business, I think it’s a smart move and complements eBay perfectly. Here’s a snippet of what I said last time the rumor broke:
  
  StumbleUpon’s new feature StumbleThru could very well be the feature that pushes eBay to new community-centered heights. Improved searches, randomly discovering auctions based on user preferences, a comment and product rating system, tagging – eBay appears to be purchasing in one fell swoop an entire community of people already enjoying and familiar with the process of rating and commenting on sites who would likely gladly do the same for eBay auctions… eBay could even further expose auctions by offering a “stumble this on eBay” option in browsers and an official eBay widget or “blog this” feature. Amazon has shown us that adding community features is a great way to increase visibility and user-retention; with StumbleUpon, eBay could leapfrog into the community game and improve its existing technology at the same time. It’s a win-win.
  Read the original entry for more.
• TechCrunch is also reporting the Fox Interactive purchase of both Photobucket and Flektor. I have to admit – this one stumps me a bit. Perhaps the next American Idol will be American Director, featuring a slew of user-contributed video submitted through MySpace. Or perhaps MySpace will move into the video and advertising markets, as it started in the indy music space. They must have some interesting plans up their sleeves.

With all these reports of money flowing through Web 2.0, I barely noticed an article that talks about where the real money is: domaining.

Meet Kevin Ham. Ham owns a portfolio of over 300,000 domain names that, together with other assets, purportedly generates over $70 million a year in revenue. His domains generate money by serving targeted ads to visitors using a practice called “direct navigation” or “direct search” – those of us who, instead of searching Google for wedding shoes, type “weddingshoes” into the browser address bar. The browser automatically attaches .com by default, landing you at weddingshoes.com – which, of course, Ham owns. Ham serves advertisements that look like real links, people click on the ads, and Ham makes money. Multiply that by 300,000 and you’ve got an impressive business model.

With that in mind, I read an interesting article at The Alarm Clock this morning about NameMedia, a company that both maintains a portfolio of domains (which are available for purchase through an in-house marketplace) and provides targeted advertising for domainers. The New York Times reports that

Youssef Squali, an analyst with the investment firm Jefferies & Company, said NameMedia faces stiff competition, “but I see these guys as the front-runner.” Among other things, Mr. Squali said the profit margin at NameMedia was 40 percent — a number that other industry executives said fairly represents the category over all.

“They’re paying nothing to acquire a customer,” he said. “I think the next wave of I.P.O.’s will be around this area.”

The direct navigation market attracted more than $800 million in ads last year, which publishers largely shared with Google and Yahoo. That figure could reach $1.1 billion in 2007, said Jordan Rohan, an analyst with RBC Capital Markets.

40% of $1.1 billion in profit – that’s a lot of money. And Frank Schilling (a big-time domainer himself) says that’s a conservative number – NameMedia could be making as much as 70-80% profit. And it stands to get even better – by leveraging RSS feed aggregation, vidcast content and other consumable information, domainers could turn their cesspools of advertising into information portals, bringing repeat traffic. Repeat traffic! Can you imagine someone choosing to visit an advertising site?

With information becoming more consumable through automatic feeds, advertising being served through more interesting channels, and an impressive profit margin, it’s no wonder NameMedia is being identified as the next big IPO. Throw in some relevant and authoritative-sounding articles served through RSS, scraped user reviews and ratings and a bunch of ads, and you’ve got a money-generating portal people benefit from visiting – Billboards 2.0.

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Webware’s choices are split into the following categories:

Browsing
They’ve included several non-Web 2.0 apps here, including Internet Explorer, Firefox and Opera. I still use Bloglines, but most of the masses seem to have moved on to Netvibes or Google Reader. LeapTag is an interesting project, StumbleUpon seems to have enjoyed a resurgence in popularity, OpenID is gaining traction (but I fail to see why it’s a Web 2.0 app), and Yahoo Pipes is a potentially revolutionary app. This is a tough one, but I’d have to pick Yahoo Pipes.

Communication
Several non-Web 2.0 apps here, along with some heavy-hitters – Gmail, Yahoo Mail, Twitter and Skype are all likely candidates in my book. While there are other interesting projects on the list, like Zimbra, Jaiku and Meebo, they don’t have the popularity of the heavy-hitters. The widget-based platforms like Netvibes and Pageflakes (where’s iGoogle, by the way?) show a lot of promise, but aren’t simple enough to attract non-techies yet. My pick – either Skype or Gmail, although that perplexingly-popular Twitter will probably win.

Community
Not so long ago, this would have been an easy category to narrow down to a short-list between MySpace, Del.icio.us and Digg. With Facebook’s recent re-launch and the resulting exodus from MySpace, that may be a serious contender as well. I’ve used DeviantArt for years and never considered it a Web 2.0 app, but I suppose it does have some of the characteristics. Bebo seems to be picking up steam, and MyBlogLog is gaining popularity after Yahoo announced some upgrades. Other recognizable services, including Ning, LinkedIn, Reddit and Netscape, don’t have the popularity to beat the top three. My pick – Digg.

Data
There’s some pretty innovative stuff here, like Swivel’s data-sharing and exploration tools, and BlinkX’s video search. Most of these services are pretty esoteric though – you’re pretty much guaranteed to be a techie if you know about them, let alone can use them. Popularity and service recognition will be a problem with most of these services – except one. Winner – Google. ’nuff said.

Entertainment
Where the hell is Joost?? It can’t be excluded due to beta status – several other included services are in beta as well. And it can’t be because it’s “not Web 2.0 because you download a client” – they included IE7 for Pete’s sake! This is a weak category – a bunch of game sites, video blogs and party planners. Really, what makes watching Major League Baseball or some dude with a hat-cam Web 2.0? Most entries are neither innovative nor useful; some, like Midomi are innovative but not really useful and others, like Upcoming are useful but not really innovative. ABC and CBS have large audiences to pimp their apps to, but I doubt most members of that TV audience know of or care about this contest. My vote would go for MyPunchBowl for combined usefulness and innovativeness, but the Kevin Rose effect will probably carry Revision 3 for the win.

Media
A lot of ground-breaking services have entered this space – it’s becoming overrun, in fact, with startups concentrating on video and photo sharing and editing. We all know about YouTube, particularly after the buzz surrounding Google’s purchase and Viacom’s lawsuit. Flickr is another popular service with recent buzz. Right behind those two in name recognition are Pandora (who recently announced deals with Sansa, Sprint and Sonos), PhotoBucket (who was recently blocked, permitted and bought by MySpace and now has a Facebook F8 app), Napster (who was insanely popular during the wild-west days of filesharing and has been trying to capitalize on that popularity ever since it turned legit) and Amazon’s UnBox service. Several entries have created apps for Facebook’s new F8 platform, including Photobucket, iLike, Mog, PikNik and Slide. For sheer name recognition, media attention, popularity, Google’s backing and features, my pick goes to YouTube.

Mobile
I have to admit, not only do I not know many of these services, I don’t care to. I recognize cell phones as the next unconquered territory, but I use mine for calls and that’s it. Besides, whatever company signs on with the iPhone will be the next big thing. I see a few interesting entries like Google’s free 411 service (it’s interesting that Jangle’s service is not included in this category), Google Maps Mobile, KushKash (a money-management app that recently received $11M private investing), TellMe (another free 411 service) and Yahoo’s OneSearch. Personally, I think any service that relies on GPS (which I suspect most cell phone users still don’t want to activate) or provides media (music, games, movies, etc) isn’t a good bet just yet – not enough people want to participate in that sort of stuff. Market penetration into this category of consumers requires something useful, practical, easy to use and not requiring a user to install an app on the phone – thus, my pick goes to TellMe.

Productivity and Commerce
Wow, here’s an open field with a lot of strong contenders. Google’s got three entries with Adwords, Calendar and Docs & Spreadsheets. eBay has two entries with eBay and PayPal. Other entries backed with gobs of name recognition and popularity include Amazon, Microsoft Office Live, , Yahoo Calendar and . Even some of the lesser-known services are heavy-hitters in their own right: Zillow and Trulia offer real estate tools and searches; Craigslist has a huge following of people looking for local job listings and classifieds; business apps SalesForce and BaseCamp (which hails from 37signals, known for Ruby on Rails and other business-centric apps); and other Docs-style apps, including Zoho, ThinkFree and EditGrid. One interesting entry has no competitor entries: Farecast, an airfare-comparison app I use quite a bit, but doesn’t have the name recognition of most other entries. This is a tough category to call, and you have to take into account the types of people who will vote for their app-of-choice – business people, for instance, aren’t likely to take the time to vote for Basecamp or Salesforce. Google and eBay may have huge followings and multiple entries, but considering none of the most popular services are advertising the contest on their sites, and taking into account the viral nature of Amazon’s community, my bet’s on Amazon.

Publishing
Is there a Google stone left unturned? Blogger, Feedburner (you did know Google bought them, right?) and Google Analytics all make the list. Adobe’s Flash and Microsoft’s Silverlight (why didn’t Adobe’s Apollo make the cut) round out the big names, and many services known to few non-bloggers (including Vox, Widgetbox, Tumblr and the infamous PayPerPost) vie for eighth place. This category, however, is all about Drupal vs Wordpress – both have large followings, are directly and indirectly advertising the poll to their users (Wordpress is advertising here) and are supported by incredibly viral and loyal communities. Backed by the Wordpress.com community, my money’s on Wordpress.

Reference
Map and local search apps get a strong showing – Ask.com (who has adopted some viral marketing lately), Google, Microsoft and Yahoo all have entries. Venerable IMDb and WebMD are present. Some recent upstarts gaining news also make an appearance, including Geni (family-tree startup by PayPal’s former COO David Sacks, gaining news and funding), Instructables (funded by Tim O’Reilly’s OATV and frequently featured on Lifehacker) and RapLeaf (a reputation tracker who made the first Facebook F8 cut). However, my bet’s on Wikipedia, who should have the recognition beyond web-heads and viral popularity to handily win this category.

Conclusion

There are some interesting entries that definitely deserve a review. It would also be interesting to see a breakdown of entries by owner and funding source – maybe I can throw one together over the next couple of days.

Who are your picks? Tell me in the comments below.

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