Jon Radoff’s Entrepreneur 2.0 Blog

Last week I was at a panel at the AlwaysOn OnHollywood event. The subject was on bringing social technology into online entertainment.

The panel was moderated by Kara Swisher (Wall Street Journal writer and co-producer of All Things Digital). My co-panelists were Drew Curtis (CEO of Fark.com), Rooly Eliezerov (CEO of Gigya) and Abdul Khan (Co-Founder, I Beat You).

My main takeaway from the panel: I think the entertainment industry is still a couple steps behind. Instead of talking about Facebook and MySpace, they should be talking about Glam and Clearspring (and, dare I say, GamerDNA). The old social-networking model that’s based on the virality of friend invites is at a point of market equilibrium in my opinion. We need newer, cooler approaches to attracting members.

You may view the whole session here: OnHollywood 2008 Archive

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The blogosphere is abuzz with news of Bing Gordon’s departure from EA to join the legendary venture capital firm of Kleiner Perkins Caufield & Byers. There’s a few take-aways from this:

• Aside from losing one of the spiritual leaders of EA, it just lost one of the executives who really “got” the power of the Internet and social media within the game industry. He’s spoken about his love of projects like Warhammer (an MMORPG) and Spore (the game which is going to change how the industry thinks about games and social-media convergence). Those will be big shoes to fill.
• Kleiner Perkins is going to be pouring a lot of money into opportunities around Facebook and/or the iPhone (just last month, they announced a $100MM fund to back Apple iPhone development). With Gordon on board, it seems obvious that Facebook and iPhone games will be one of the key areas of investment.

Make no mistake about it–games and consumer entertainment products are becoming a major area of VC investment; and with KPCB putting so much money in, there will be many more funds to follow.

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When I read Steven Baker’s write-up on Facebook’s server farm–10,000 servers and counting–I was amazed. Why the heck does Facebook need that many servers? It isn’t apparent to me that Facebook needs more than a few hundred servers. Some other commenters observed the same. But perhaps there’s more to this than meets the eye.

Google’s server infrastructure was covered in Business Week’s Google and the Wisdom of Clouds in December 2007. I was awed by the huge amounts of money being spent to build their server infrastructure. Even the electric bill is running $25MM/year per datacenter! Nevertheless, it makes sense for them: Google runs a huge number of applications, and making their server infrastructure available to developers is a big new business for them. Amazon discovered the same thing–why not make the cloud available to everyone, and profit from the world’s hunger for server capacity?

The biggest “problem” with Facebook’s f8 platform (that’s the platform for creating Facebook applications) is that you need to provide your own servers. This has led to quality-of-service issues with a lot of applications, and also creates another barrier to getting developers to make things for you.Might Facebook be ramping up server capacity because they plan to enter the cloud business as well? It would make a hell of a lot of sense. They’ve got a platform for building social applications with a built-in distribution model; if they could also integrate it with ability to offer flexible scaling of server capacity, then they’ve got a win-win with developers that could potentially leapfrog Amazon and Google’s clouds.

I have no idea of Facebook’s intentions, but this certainly suggests some of the amazing possibilities with social media businesses as they continue to scale.

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