Buying a Kindle DX ten months ago and now an iPad (delivered in the first batch on April 3rd), it really struck me recently how messy (or exciting!) everything is getting.  Mash-ups of business models are happening everywhere, and at an accelerating pace.  Here are a dozen big trends that I'm watching for this year, some relevant to Bazaarvoice and others not so much:

1. After Amazon.com launched the Kindle, it quickly became their number-one seller.  The free wifi to download a book from anywhere was just too compelling to pass up, along with the very easy to read screen.  Amazon projected that it would increase compulsive buying of books to the point where the wifi was subsidized by Amazon.com.  And it is working (for now).
2. And while we're talking about compulsive buying, consider Amazon.com Prime for "consolidated" buying vs. other retailers.  Other retailers have tried to emulate Prime and failed to do so.  It is difficult to do – you have to be very quick to ship (i.e., many distribution centers), with the availability (i.e., tons of inventory), to really trigger the compulsive buying effect.  There are profound implications on the long-tail as Amazon.com expands.  And, in their most recent quarterly report, Amazon's same-store U.S. sales were up a staggering 75%.  It seems that both the Kindle and Prime are triggering the compulsive buying effect, coupled with Amazon's long-tail inventory.  Many retailers same-store sales are flat to down as we come out of the Great Recession, and Amazon.com's stellar performance has to be noticed by them.  Our Chief Marketing Officer, Sam, blogged about this in November of 2008 and it is even more true today.
3. Enter the iPad.  The week Apple launched the iPad it sold 450,000 units with 600,000 books (via iBooks) shortly after.  Now that I have had the iPad for awhile, I don't just think of it as competitive with the Kindle or other eReaders or "tablets" – it is also competitive with netbooks (another mash-up), as Steve Jobs eagerly stressed.  Just project out a few years when the iPad has 256gb capacity, instead of the 64gb my model has today, combined with the new iPhone 4.0 OS (coming out at the end of this year) that enables multitasking, a micro-USB port or two, and wireless streaming everywhere allowing for seamless connectivity no matter where you are.  The iPad already has a keyboard docking station, which I also bought, and, of course, bluetooth for connecting to wireless keyboards.  And new TVs and DVDs are coming out with built-in home network and wireless capabilities, allowing you to stream TV to laptops, netbooks, desktops, iPads, iPhones, or whatever you choose to use around the house (or while you are on the road if you have a Slingbox or something similar).  The bottom line is that the genius author, Kevin Kelly, got it right in this Wired magazine article (comparing tablets to a portable window into the world).
4. Will the iPad hurt Kindle sales?  Many Wall Street analysts and journalists think so.  My personal take?  Well, I was skeptical about whether or not I would enjoy reading books on it as much as I do the Kindle.  Initially we were just buying the iPad as a family device for watching movies, playing games, and keeping up with blogs, Facebook, and Twitter.  But now with the Kindle app loaded on my iPad, adjusted to a sepia "paper" color and 60% brightness, I can read for hours just fine.  But to really see how the iPad transforms books, just check out the book it comes pre-loaded with (a Winnie the Pooh children's book, which is, of course, in beautiful color).  No color on the Kindle.  Every try to read a no-color book to a child?  And then check out the app, The Elements, which has gorgeous color, 3D illustrations, and full-on video.  Or look at what Wired magazine may be planning to do with tablets.  I was watching Alice in Wonderland with our daughter recently, and Alice said (shortly before falling down the rabbit hole), "What is the use of a book, without pictures or conversations?".  Just look back in history at the adoption rates once color television came out vs. black-and-white television.  It is just a matter of time before our children are carrying interactive tablets in their backpacks instead of heavy textbooks.  Yes, I think it is going to impact Kindle sales.
5. Ok, let's talk about mobile.  Google's Android (open platform) continues to gain traction vs. Apple's iPhone OS (closed platform).  It wasn't surprising to me when Eric Schmidt resigned from Apple's Board of Directors.  I moderated a panel of amazing venture capitalists at NRF and Shop.org's Innovate conference back in March, where my good friend Peter Fenton of Benchmark Capital predicted that Android would overtake the iPhone OS over time.  Of course, Android will power tablets too.  We've seen this movie before as Apple stayed closed vs. the PC world being open.  Will the movie be the same this time?
6. Mobile is now at a tipping point, with GPS built in, good camera phones, and great web browsers (e.g., Safari and Chrome).  We'll see a lot of mash-ups in this area as mobile is increasingly used by consumers while in stores, which will one-up the mobile use we've seen in social commerce so far.  Interestingly, the VCs on my NRF and Shop.org panel in March thought it would take several years, so our prediction about "the year of mobile" in 2009 may have been a bit early, although I would argue that the iPhone's rapid adoption that year did change the game.  And it certainly hasn't slowed down Mary Meeker at Morgan Stanley to produce the most comprehensive report (at 424 pages) I've ever seen on the state of the mobile industry, nor did it prevent NRF and Shop.org from having a Mobile Boot Camp at the March conference.
7. How about blogging?  My guess is that blog-post length has decreased (this post aside!) as Facebook has increased to a longer status format and people have become more and more used to Twitter's 140-character length updates.  Perhaps blog views have also decreased.  This leads to more "lightweight", or surface-level, conversations than the deeper-thinking conversations on blogs.  But we'll survive just fine.  I simply don't buy Nick Carr's arguments but I'll debate that later if you wish.
8. Although this would be the obvious place to discuss this trend, I'll purposely stay away from Facebook Like vs. Google Buzz vs. Google AdSense as my co-founder and our Chief Innovation Officer, Brant, is addressing that in a future post.  But needless to say, social is permeating the Web and that trend is accelerating, so we will continue to innovate quickly in this area.
9. Let's talk about transparency.  At the Liberty Interactive NetLeaders Forum in 2008, I remember Rich Barton, founder of Expedia and Zillow, presenting, "everything that can be reviewed will be reviewed [on the Web]".  He showed us examples of CEOs being reviewed on Glassdoor.com.  My opinion?  This will lead to a company culture revolution, which is part of the reason I feel so compelled to write my forthcoming book, How to Make Your Company Suck Less.  And Chris Fralic of First Round Capital as well as Kamal Kirpalani of Bazaarvoice recently asked me to review them on Unvarnished.  I wrote about transparency awhile back, based on a leadership talk I gave at The Wharton School.  In short, I think this is a very profound trend that will not only cause a renaissance in commerce but also in politics, government, and all types of human activities and relationships.
10. At Bazaarvoice, we're leading a revolution of marketing and merchandising with social commerce and user-generated content – or (my preference) digital word of mouth.  Digital word of mouth is quickly becoming the central point of insight for marketers and merchants.  We are writing the marketing and merchandising textbook of the future in our work with our clients (read my previous thoughts on this, from when we reached out 100-billion-impression milestone in February).  Digital word of mouth is getting mashed-up versus the aging focus group, NetPromoter, customer survey, and other methods that get "close" but aren't nearly as pure as how customers speak to each other with no bias vs. how they communicate while in the context of talking to the company.  Things for you to consider here: a) the market has always been based on conversations (read this chapter that was the namesake of our company), b) reviews are the new advertising as we are already beginning to commonly see, c) consumers write reviews to help each other (i.e., altruism, or with no bias), and d) this trend is why Google and Nielsen partnered with us.
11. Channel marketing is becoming more wired.  We see a major trend in this area with the adoption of our BrandVoice and BrandAnswers solutions.  We are at the beginning of this shift, and it is logical to think that, just as offline to advertising shift has fueled online advertising, we will see a similar accelerating trend as suppliers of retailers become more savvy at online channel marketing in a world where 80% of consumers read reviews while they are shopping (Nielsen's most recent stat).  And, of course, mobile is a major accelerant of this trend.
12. Finally, the digital executive will continue to rise in prominence as companies work hard to make sense of the rapid shift to a more digital, hyper-connected world.  For some early indicators of this, look at Raul Vazquez's promotion from CEO of Walmart.com to EVP and President of Walmart West.  Or Toby Lenk's, the founder of the original eToys, rise to President of Direct at Gap.  (I should mention that both are among the best speakers we have ever had at Shop.org events, where I proudly serve on the Board of Directors.)  These are very exciting times for those who really "get it" in digital.

For the long-term potential of the Web, I recommend you check out Kevin Kelly's speech at TED in Dec 2007 or his similarly brilliant article in Wired magazine.  And if you have time to get really far out in thinking about technology's impact on the world, just read chapter 1 (trust me, it's enough) of Ray Kurzweil's The Singularity Is Near: When Humans Transcend Biology (thanks to my good friend, Ethan Holland at American Eagle, for suggesting it to me).

As I promised, Part 2 is more focused on the forces shaping global commerce that we directly see in our business, working with our clients and partners.

5.    Digitally archived word-of-mouth: Blogs are here to stay (see BusinessWeek for a recap).  Word-of-mouth online is not a phase.  It’s a permanent shift.  Word-of-mouth has always been with us (that’s why I named our company Bazaarvoice).  More than 70 of the top 100 retailers in the U.S. have, or are launching, customer reviews today.  When Brant and I launched Bazaarvoice three years ago, only five retailers in the U.S. offered customer reviews, including Amazon.com.  Over the past three years, we have served 10 billion reviews to shoppers (see our recent celebration of this and real-time counter) and are on a current run-rate to serve another 20 billion over just the next year of our business.  Customer reviews are word-of-mouth.  People speak the same way about products online as they do offline.  We are literally seeing word-of-mouth for the first time in human history.

        Luxury retailers are still vigorously debating this – not wanting to give up control and open up their brand.  Like I do almost every week (it seems), I spent time on Wednesday in NYC debating this with the head of online marketing and merchandising of a luxury apparel retailer.  Meanwhile, Best Buy and Wal-Mart have been launching incredible multichannel campaigns (see them here and here), leveraging the power of customer reviews to drive sales online and offline.  Wal-Mart and QVC have all of their online merchandisers plugged into our reports.  They are having intense conversations with their suppliers to reduce returns, increase customer satisfaction, and ultimately evolve their offerings.  The end-game?  Better products and services for all of us.  I knew we were on to something big when we started Bazaarvoice.  But I had no idea it would affect this much change, this quickly.  The fact that Wal-Mart launched customer-review-focused, in-store nationwide campaigns only six months after they launched with us online has staggering implications for the retail industry.

        And it’s not just limited to retail.  Any market where word-of-mouth plays a significant role in driving the transaction are good markets for the type of transformation we offer.  We are, or soon will be (due to signed agreements), powering customer reviews for some of the largest manufacturers of consumer products, banks, credit unions, insurance companies, portals, travel sites, and healthcare companies.  We are doing this globally, in 20 international languages.  We have four offices now – Austin, London, Paris, and now Singapore.  This is a global movement.  As an entrepreneur, it is impossible for me to not be passionate about helping clients lead this transformation.  Word-of-mouth online is an incredibly disruptive force, and I mean this in a positive way if harnessed correctly.  Why did I start this company after seven years at Coremetrics?  Because I knew it worked – but I didn't realize that it worked as well as I know it does now. 

        Seven years ago, Michael Porter wrote about the Web’s incredibly disruptive impact on the five forces (standard material for any MBA program).  When I read this article in 2001, I thought, "Porter is late to the game".  Now when I re-read it in the context of the social media movement, I think he was incredibly visionary.  Smart companies are reaping the rewards of that disruption, while others have been too slow to change and are going out of business.

6.    Six degrees of separation (tip of the hat to my brilliant and passionate friend, Mitch): Millennials are growing up connected to social networks, namely Facebook.  Their network of friends is intact for as long as they’ve been in “the system”.  They will be able to track their friends’ progress throughout life’s many stages – forever.  I’ve been a programmer since I was 7 and have communicated online (via BBSs) since I was 8 (launching my own when I was 10).  So I can relate.  But I can’t imagine all of the implications of all of this connectedness.  What does it mean, as a human being, to be able to so easily track your friends evolution in life as they go from preteen to teen to college to career to marriage to parenthood and, ultimately, to death?  A typical Millennial is connected to hundreds of friends on Facebook.  By comparison, I personally keep in close touch with only one of my early childhood friends (a few more are reconnecting via Facebook, but I have missed decades of their life and its hard to relate to them anymore). 

        How will these Millennials be shaped by this as shoppers?  As people?  Obviously, social media everywhere will be an expectation.  Ubiquitous Web access, via mobile, is rapidly coming.  How will companies adapt?  Typical Facebook banner-ads are getting .005% click-thru rates, as reported on the Web 2.0 panel at Shop.org last week by those helping their clients experiment with them.  That’s pathetic performance!  Millennials don’t want the disruption by brands when they are in the modality of friending – unless they actually help them enhance that experience.  Being on Google, Yahoo!, or Live.com and clicking on a paid-search link when they are in a shopping modality is a whole different story, and obviously that works – ridiculously well.  Facebook applications, however, are performing when they give unique value to these consumers.  On that same Shop.org panel, the Victoria’s Secret PINK Facebook application was pointed as one good example. 

        What are the long-term implications of this connectedness?  I don’t know, but we’re determined to help figure this out by working with all of our clients.

Thank you again for an amazing three years in business.  It is a true honor to work with such smart clients, and I look forward to seeing you soon at our Social Commerce Summit. 

My co-founder, Brant Barton, told me about Wikileaks.org a year ago.  At the time, we discussed that it could be the new user-generated "Watergate".  I didn't write about it then because, frankly, I wanted to see if it had staying power.  And then I read an article today, one year later, about how they were shut down by a federal judge, only to quickly reopen under massive protest.  If you haven't checked out this NY Times article, or their site yet, it is worth doing so.  User-generated content, via a connected global experience (i.e., the Internet/Web), will radically transform governments, corporations, and journalism, just like it is already doing for retail and travel.  There is no way it won't.  Information can't be confined to small geographic spaces anymore.  And accountability will be enforced throughout the system.  Operating with ethics and integrity is the only way.  And don't get me started with what happens when all voting in elections is truly done via the Internet, instead of today's outdated and cumbersome method.  The cat is already out of the bag.

We live in such an exciting period in history.  Humanity is being unleashed online, and it will only accelerate from here via word-of-mouth.

Additional materials: Look at this NY Times blog entry for the background on where Wikileaks.org originated from.  A globally-connected experience, indeed.

This marks a seachange in the financial software space.  Intuit is known as one of the best companies in the world to work for, and now they are known as one of the most "open" brands for embracing customer centricity through user-generated content.  Although the reviews are generally very positive, what makes them authentic to customers is that even a 5-star review will point out features that Intuit can improve in their next release of TurboTax.

I applaud Seth Greenberg, the leader of this initiative and a former Shop.org Board peer and CEO of eHobbies, and his team of remarkable people.

I encourage you to check it out for yourself by visiting TurboTax's home page to see the reviews.  And here are three of the campaign creatives that appeared this weekend.

AOL "Review Bubbles" (note the instant-messenger look):

Review quote:

 Yahoo!'s home page:

Note: these are online-only promotions.  If you have been missing the news on Bazaarblog, check out these great examples of multichannel promotions in 2008 from Best Buy (Bazaarblog link) and Wal-Mart (Bazaarblog link).

The Social Commerce industry hit another major tipping point this holiday season.  Wal-Mart, the world's largest retailer, has begun the process of integrating user-generated content into their stores.  There are three integration points so far (see the bottom of this post for screenshots), with undoubtedly more to come:

1. Store merchandise receipts: encouraging customers to write reviews and visit Walmart.com to shop by reviews.
2. Store shelf fact tag: encouraging customers to research reviews prior to their purchase.
3. In-store and newspaper circulars: encouraging customers to visit Walmart.com to shop by reviews.

In all three integration points, Wal-Mart is pointing their customers to a common URL: Walmart.com/ratings.  This campaign "landing page" not only teaches the mass market how to write reviews (many of them for the first time) on Walmart.com, but it also teaches them how to shop by reviews.   This is a great showcase of what is possible with our partner integrations – Endeca, in this case (see Brant's December interview with Endeca).

This is a nationwide campaign for Wal-Mart, and one of the best examples I have seen to date of multichannel integration.  We have been giving webinars and advice on the topic through our Community Managers and, 2007 marked the year where we saw a lot of traction in this area (ask us for other examples).  But to see the world's largest retailer launch this in such a powerful integrated fashion, just six months after launching Bazaarvoice, is extremely impressive.  Congratulations to our Client Services team for proactively working with Wal-Mart and achieving such a milestone for both our company and industry.

Since the launch of this campaign, we have seen Walmart.com's customer review volume increase substantially. 

For other ideas on multichannel integration, be sure to check out my December post on the topic (integrating for maximum Black Friday and Cyber Monday benefit) and ask your Community Manager for ideas.  We are working hard to evolve with our clients in this area because we see the real impact of user-generated content extending far beyond the walls of your website.

There is no doubt that 2007 has been a banner year for Bazaarvoice.  From winning Red Herring's Global 100 award to launching clients like Wal-Mart, we have achieved one major milestone after another.  And there is also no doubt that it is because of our amazing people that we have had such a year.  I wake up every day with a smile on my face because I work with the best and the brightest.

Culture has been important to me and the executive team from day one.  We regularly put initiatives and policies in place to shape our culture, and it works.  One of them is that we never compromise on hiring.  If we have the slightest reservation about a candidate, we'll pass.  This keeps our foundation incredibly strong.  Some of the others can be seen if you click on the link at the beginning of this paragraph.

For our holiday party, I asked our team what they liked most about working at Bazaarvoice.  I then presented the best of these at our holiday party.  Here are some of my favorites:

• Delivering value to everyone [to businesses because we increase their revenues / to consumers because we help them make better decisions].
• Co-workers – it is such a relief to know that the people you work with are dynamic, smart, and capable. I also like how everyone is constantly striving and surpassing goals that the entire group is working towards.
• The vast opportunities here. There are always new things to learn, teach, improve, and create.  It makes me really feel and see the personal and professional growth that I’m experiencing at Bazaarvoice.
• The opportunity to work with other people that are themselves jazzed about coming to work every day.  There is a buzz here I've not felt in years in the work environment.
• The people – we rigidly guard our culture.  When we decide to hire somebody, we're as sure as you can be during an interview that the person will fit in at Bazaarvoice.
• We're a very healthy company.  Many of our employees are friends outside of work.
• Good work/life balance – this company is really good about having fun while working and organizing events to get us out of the office and have a change of pace to prevent burnout.
• The "winning team" feeling.  Our company is kicking &*$, and it's great to be on the winning team.  Our competition is inferior to us and we enjoy the success that we have as a team.
• The people – everyone at Bazaarvoice is incredibly helpful.  I feel like I don't have to deal with any unnecessary red-tape when talking to anyone and we all work together to get things done. It is awesome to work on projects and know that everyone else at Bazaarvoice has your back and will be there to support you.
• Our client list.  It is awesome to work on so many well-known companies/brands.  I bet everyone related to a BV employee gets annoyed when we start pointing saying "they're a client… they're a client… they're a client…" but it's just so much fun.
• Complete trust of the proven leadership at our company.  Our solutions are a perfect match for today’s market.
• Everyone I work with is a top performer, without exception.  Because of this, I am constantly challenged by my teammates and have had faster growth here than anywhere else.
• Bazaarvoice People – there's nothing more inspiring than being surrounded by people who like to dream big, always present the energy and excitement on how to improve things, and make things happen.
• There’s a fantastic mix of autonomy and teamwork, which brings out the wacky individualism of everyone as well as the accountability of being part of a team.
• I would actually pay money to see my colleagues’ responses to this question – they’re that creative, energetic, and bullish on Bazaarvoice.
• The products – our products work and our customers love them.  It’s exciting to be on the cutting edge of word of mouth marketing.
• Our customers – we are working with some of the largest companies in the world and it is exciting to know that we are impacting their business.

2008 is going to be an even more amazing year for Bazaarvoice and our clients.  With 7 products in 20 languages, referenceable clients across the world, a clear business opportunity, and a winning team, the sky is the limit.  If you are thinking about joining us, now is the time.  Click here to see our job listings, and please – spread the word to your friends!