I’m generally a fan of Wikis. They allow a wide audience to contribute their knowledge in an easy to consume way. That being said, Wired Magazine needs to give up on their “How-To” wiki as it is really lame.

A month or so ago I bought a new kitchen table at a major online furniture store. A couple of weeks later the item we ordered showed up by UPS freight and it was exactly what we expected. So good product, good service at the right price = happy customer.

Earlier this week I got a call from the quality assurance department at the same online retailer inquiring as to my experience ordering from their store and whether I had any suggestions as to how it might have been better. I didn’t (everything went fine) but the phone call was nice to get. Obviously they care about how their customers view them which is somewhat unique even in today’s tough market environment.

What was interesting is that they offered me $20 in cash if I was willing to leave an online review of their store on any of the major price comparison sites. They didn’t require a positive bias, just that it be an honest review and reflect my experience with them. Now, $20 = 4 expensive yet addictive Starbucks mochas so since I had only positive things to say anyway I took them up on the offer.

But it got me thinking as to the value of online reviews in general. My premise for years has been that you only get two types of online reviews - very positive ones (regardless of the score, the writers are usually satisfied) or very negative ones (where the writers have an axe to grind…often justifiably). Obviously in the above case the store was trying to influence a positive online bias as I doubt they were offering cash to customers who were dissatisfied.

So with sellers trying to game reviews and the reviews themselves being bipolar for the most part, how much value to they really add? Couple that with the fact that the more reviews that get posted on a specific item, the bigger the chance you’ll get equal negative and positive ones. My conclusion is that the summary scores for reviews (all those stars on listings) tend to be useless and that the quality of the review is entirely based on what the person wrote.

So we need a better way to extract the real meaning from all those online reviews and work out which ones are designed to game the system. I haven’t figured it out yet but if I do, watch for a startup based on the solution as there is a real need. Maybe the real value is when things turn really negative as it allows you to avoid bad products or services. So negative reviews work and positive reviews don’t.

So we need a negative review search engine…maybe www.stuffthatsucks.com? (I checked…already registered).

So the big announcement yesterday was that Google is entering the hosted application space with their Google Apps Engine. So far in this space, Amazon has been generating the most press with their web services offerings and specifically S3, their hosted database server (which incidentally went down again recently).

While the blogsphere has lit up on the topic of cloud computing based on Google’s announcement, as someone who has launched an Internet based startup and would in theory be a target for these services, I continue to struggle with them conceptually as I’ve written before.

In launching TravelGator, the things we struggled with were not the things that Google or Amazon is trying to solve. Granted, perhaps once our traffic is at a level that requires resources to handle millions of users we might need some of their infinite scalability, but I’d argue at that point a company has the resources to manage their own infrastructure and actually wouldn’t necessarily want to suffer through the problems that full outsourcing can cause.

That being said, the real problems that an emerging or mid-market online company struggles with have nothing to do with large scalability. Ours included:

1. Feeds integration - we get data from lots of partners in lots of formats (some of it really dirty). It was a HUGE task to write all the code to standardize it and even to date I’ve not found a good infrastructure to handle it. Even cool tools like SnapLogic don’t seem to be able to handle complex feed integrations where the data is excessively dirty.
2. Search - OK, here is a place that Google should be able to help. The issue we ran into though is that the tools that are available for searching structured data rather than unstructured data are very difficult to get working correctly. If you want to search your site text - no problem - but try figuring out a way to take a search for “Hilton” and return “Hilton Head”, every Hilton Hotel and anything else with the word “Hilton” in it all organized and filtered by the type of data being returned. It is really difficult (and no, straight SQL doesn’t work in this case).
3. SEO - again, the folks at Google should know something about this. The dos and don’t for search engine optimization are well known but very few application stacks automate it (Ruby on Rails being one exception but as a framework it limits your flexibility in numerous other ways).
4. Front end design - this is a real killer. The libraries and tools that exist for doing true, template based website design are stuck in in 1990s. It is about time someone created a front end, WYSIWYG editor that was a powerful as PhotoShop and Illustrator and creates clean, HTML code that can be easily integrated with an application server. This is a problem worth solving as much of the cost for developing a site goes into the creation of the user interface.
5. Ad serving - much to our surprise, third party ad serving engines aren’t very sophisticated. There is an opportunity here for a innovative company to abstract away all the ad networks and affiliate networks and allow sites to properly monetize their page views. A better solution should exist and should be part of the application framework.

I could go on but these are the biggies. Databases and Python engines are all very well and good, but to really get me to jump out of my seat I’d have to see all the other services come together into true building blocks. Then I’d get really excited.

Most creators of widgets have focused from the beginning on utility - in order for a lot of people to put (and keep) a widget on their site, it has to contain something useful. The obvious stuff includes weather, news headlines, stock market info.. sure there are plenty of novelty widgets out there, but I suspect a lot of people who do install them end up removing them once the novelty wears off.

Not that short-term novelty content is a bad thing, but it’s hard to build a business on. I recently came across a different approach, on a food-related site called Nutrition Data. Given that they’re owned by Conde Nast you can safely assume they’re interested in having a solid business model. What makes ND’s widget interesting is that it offers functionality and not just content.

The ND widget allows users to look up the nutritional specs on various types of food. It pops up a separate window for the search results, so as not to annoy host sites by redirecting their user traffic. The popped-up window is on their main site, so they get the pageviews and ad revenues from that point on.NutritionData is a pure media property, their only income is from ads, so the widget is definitely a traffic play. But what they’re doing is offering functional utility in order to draw traffic in, rather than pushing their content out through their widget. It’ll be interesting to see how much of this creeps into the rest of the widgetsphere, stay tuned.

In the physical retail business, it’s common for manufacturers to pay retailers to get the best shelf space. The most common way is called “co-op” or MDF (Market Development Funds), the manufacturer pays the retailer cash that the retailer spends on local ads or other promotional programs to help sell the product. A more extreme version is a slotting fee that a manufacturer sometimes has to pay simply to get their product onto the shelf.

The practice has recently spread to the e-commerce world, facilitated by companies like Guidester. In the old days, when you visit an ecommerce site and type something into its search window, the results you get are ranked by relevance, using some type of search algorithm. What Guidester offers e-retailers is the ability to sell placement in their search results, on a pay-per-click basis. Kind of like Google AdWords, except in the main results rather than alongside them.

Search results for “digital camera” at ritzcamera.com

This of course degrades search results - the whole reason Google runs paid ads alongside their regular results, and never mixes them. Google also gives preference to ads based on relevance to the search keywords. If retailers start selling their search results (via brokers like Guidester) to the highest bidder, you could easily get completely random stuff showing up instead of the products you were looking for (see screenshot above).What will keep this from getting out of control is the same thing that motivates Google - when you only get paid for click-through, you care whether see things they’re interested in. The same thing keeps retailers honest with co-op and slotting fees, the product does have to sell for them to make money, so they won’t put just anything on the shelves. And if they play their cards right, e-retailers can get some extra cash for selling stuff they would have sold anyway.

The real losers are smaller manufacturers - for a while it looked like e-commerce would level the playing field by making more obscure products readily accessible to consumers. But if e-retail search results are sold to the highest bidder, consumers will have a hard time finding smaller manufacturer’s products even if they’re looking for them. It’ll be interesting to see whether e-retail goes all the way and mirrors the physical world, or whether some new twist will throw everyone for yet another loop.

Social shopping/retailing has been getting a lot of press lately, especially its role in helping small retailers reach customers. Top sites include stylehive, Kaboodle and ThisNext, which are all dedicated to online shopping, with users flagging favorite objects available at any online retailer.

Like more general-purpose social networks, these sites play to users’ egos by having profile pages that show off a user’s individual taste. As is typical in most communities, you get a small handful of alpha-users who generate a disproportionate share of the content.. sites like stylehive encourage these people by allowing users to “follow” lead trendsetters and receive updates when they flag new items.

While social shopping is getting a lot of buzz, the volume generated from these sites barely registers - I wasn’t able to find any stats as to what percentage of online retail dollars come from social shopping. Keep in mind, too, that online sales are still only about 5 percent of total retail in the US. But the phenomenon is likely to spread, especially when it migrates to more general social networks like Facebook and Myspace.

When it comes to shopping of any kind, only a tiny minority of the population can be called tastemakers and the rest are followers, buying whatever friends or magazines say is stylinsh, or whatever is put in front of them by retailers. But there’s also been a resurgence of interest in original and unusual goods. For all the homogenization that’s been happening in the retail landscape, flea markets never really went away. As online shopping matures, it will be interesting to see the balance between the walmart.com-style megasites and the bazaar-like style represented by social shopping.

The blurring of content and commerce has been going on for several years now. You could even argue that it happened in offline media first - fashion magazines list brands and prices of every item of clothing on every photo, and magazines like Lucky drop the whole editorial pretense and just tell you what to buy.

There are examples of this online of course, but the Internet being what it is, we’ve started to see many more permutations. The Wall Street Journal ran an article the other day about a woman who posts youtube videos of herself discussing and making her latest painting.. if you like what you see, you can go to her site and buy the painting.

Refinery 29 is a fashion site that runs articles featuring the latest hot designers.. but it also has an online virtual “mall” where you can buy items from said designers. Clever, no? But the real genius is that, as you click around their shop, you generate so many more pageviews, which means more ad revenue for them.. we just might be seeing a lot more of this model in the future.