Download PDFIt’s hard to turn a corner, online that is, these days and not encounter a widget, a widget company, or someone excited about widgets in general. The appeal of widgets is somewhat easy to understand:
- Publishers are looking to break free of the shackles of their publishing platforms and widgets provide them with an outlet for self-expression, and sometimes even revenue
- Widget makers are looking to leverage their underlying services and get exposure at the edges
Of course, the relationship can be much more complex and involved, but that’s the gist of it. David Hornik comments on this new Widget Economy:
But what struck me as I talked with the latest generation of media platforms — be they for photo sharing or video sharing or animation — was that these companies are going to face a serious challenge when it comes to monetizing their traffic. That challenge is a byproduct of their precarious relationship with the “host” services to which they attach. To the extent those relationships are symbiotic, the combined organism will thrive. However, to the extent those relationships are, in fact, parasitic, the host will need to shed the parasite in the name of survival.
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Despite these challenges, I am extremely bullish on the widget economy. I believe that the vast majority of these relationships are indeed symbiotic — great experiences being enjoyed by millions of consumers are enhanced by additional great experiences developed by third party widget companies. Unmonetized, these widgets are a gift to the hosts — they allow for a more engaged consumer with a more engaging experience and cost the host nothing. Thus, it will be up to the hosts and widget companies to sort out the economics in the coming months and years. I expect significant progress on that front this year and look forward to being a part of that evolution as I continue to invest in hosts, widget services and content aggregators alike.
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May 16th, 2007 at 10:28 am
Very interesting!
Somehow widgets are going to have to display some sort of advertising with a small percentage possibly going to the publisher as an enticement.
May 16th, 2007 at 11:00 am
I agree. I think that there will be an eventual class of widget providers that provide revenue sharing with the publishers. This happened with blogs, video and I’d expect with widgets.