Michael Fauscette

Dealing with Online Profiles

Sometimes I feel like I'm having a profile crisis, or maybe that's a profile anxiety attack. I mean, how many profiles do I have online, how up to date are they and how can I possibly keep track of them all, little lone keep them current? If you're active online then you know what I mean, and my inclination to try every new site I find (I am an analyst after all) doesn't make it any easier. Of course with that level of experimentation comes a bunch of orphaned profiles as well, left to live on indefinitely, untouched, out of date and forgotten. The explosion of networks, communities, social tools, social media sites in the consumer world was the only the first wave of these profiles though, as social moves into the business world look for the number of profiles to rapidly increase again...and this time those profiles are tied to your professional image directly (although I'd argue that any profile you have online is tied to your professional image to some extent). What I'm saying is that if you think you have profile anxiety today, what will that look like in a year or two as more and more businesses implement and use social tools and those tools become increasingly business critical.

As the number and types of profiles explode there is ever increasing need for some way to manage them and control the different types of information they display. This year in our IDC predictions we talked about profiles, making this prediction: "Social profiles become the Internet fingerprint". If you read our commentary on the prediction though, you'd see that there's a lot more to this than the prediction seems to imply (sorry for non-IDC clients, that doc is a subscription required pub, but I'll expand on the idea in this post anyway). While the "digital" fingerprint implies criticality it also points to the fact that the need to manage that digital fingerprint is even more important. Today, even though there have been a few attempts at solutions for profile management, there is no good, secure, single source way to accomplish this daunting yet critical task.

Now at this point I'm sure some of you are thinking what about Facebook Connect? Well, let's see, I suppose with the momentum that Facebook has it is possible that Facebook Connect could evolve into a profile management platform, at least theoretically. Aren't more sites supporting the standard as one way to sign up / set up profiles? I read about Quora's recent experience with Facebook Connect and as they say, it ain't pretty. (BTW, if you're not familiar with Quora, it's basically a crowdsourced Q&A site that has seen explosive growth over the last few months. All the "cool" people are congregating there, in fact feel free to check my profile out here and follow me, I'll follow back...and yes, that's a shameless plug). Anyway, as the story goes Quora launched with Facebook Connect as the only way to sign up for the service and after watching behavior for awhile they noticed that many more people visited the site than actually signed up. They added Twitter Connect as an alternative method and the number of connects to visit skyrocketed. I realize that this is only anecdotal evidence but still, it's interesting. For me, I remember thinking that I was happy they provided FB Connect, but I'm lazy about building new profiles and I suppose I'm way to numb to the Facebook privacy issues. And speaking of privacy let's not forget that many people do not trust Facebook and could easily be turned off by having Facebook as a profile management platform. So even though Facebook has a lot of the data that would be needed, has critical mass from an adoption standpoint and most probably the underlying platform that could be modified to provide the single source profile management functionality needed, I seriously doubt they could become the single, trusted, source of profile truth due to the strong perception of disregard for personal privacy...it's simple, we don't trust them enough. I'm not sure that a current network, community or other site could pull this off anyway, there's a strong potential for abuse and if a profile platform is to succeed it cannot in any way feed that perception, it has to be above reproach to gain the level of trust and momentum needed to be successful. That said, I just read that apparently eHow has just announced that it's going FB Connect for login and profiles exclusively.

I am convinced that current sites probably can't pull off providing a profile management platform, the trust hurdle is very high. What about an open standards based approaches? There's OpenID for example, which specifies an open standard for authenticating online ID's through a distributed model of hosting web sites and relaying sites.  OpenID (read more about it here and the OpenID Foundation here) addresses the online identity portion of the problem effectively and has over a billions users on millions of sites (it's hard to collect actual adoption metrics because of the distributed nature of the initiative). OpenID then, could be part of an online profile platform approach and at least defines a part of the profile standard.

By now, hopefully I've at least made you think long and hard about the existing ways that this problem could be solved. I'm convinced that there needs to be a fresh, new approach to this problem if we're ever going to get it under some kind of control. So what might this magical profile management system look like? I'd think it should include:

• Built on open standards
• Highly secure, cloud based platform
• Granular and wide ranging profile information - sort of converged resume / CV, social profile, and personnel data
• Open API
• Secure backup
• Highly granular ability to control each profile data element. This is the key, the ability to control what data is shared to each site / profile based on the user selection. For example, on Facebook I want to show my favorite movies and not show my work history, but on my internal business network profile no favorite movies and detailed employment history...all user selectable.
• Verified identity (and possibly incorporating OpenID standards)
• Clear individual ownership of your own data

None of this sounds very hard, and technically it's not. The hard part is getting something like this adopted by individuals and supported by most of the online places you'd need a profile. It's the old chicken or egg problem as well, do you go for adoption to force support or would broad support drive adoption? There's great value to individuals, ease of use and management, a single version of the truth, security, granular privacy management and most of all simplicity. There's also value to the broader Internet community, especially with identity verification. There is also value for the sites that participate, as I'm certain more people would be inclined to open accounts / sign up if they didn't have to recreate a profile every time they joined. The sites would also benefit from a richer and more complete profile and from independently verified identity. There's even support from the Obama administration for solving the problem. The biggest barrier to getting support from the different sites though, I think, would come down to control of the data (and in many cases ownership of the data as well). This is an ugly problem that is just getting worse every day...waiting for a solution.

Tags: profile, identity, Facebook, open standards, trust

Facebook Aiming to be the Central Hub for Social Shopping?

I read today that Facebook just started testing a new feature called "Buy With Friends". It seems that the feature, which only works today with virtual goods inside games, let's users get discounts on items that their friends buy. When a user makes an in-app purchase of a virtual product using Facebook Credits they are offer the option of sharing the purchase in their newsfeed. If they share it their friends can then buy the item directly in the newsfeed at a discounted price. According to an article in Forbes, Facebook reported that in early tests more than 50% of users chose to share their purchases with friends. They didn't say what the downstream click through was though, but I'd assume that it would be reasonably high. Facebook Credits only work for virtual goods today and these tests are in-app but the infrastructure needed to do this with actual goods would be the same.

In our 2011 IDC predictions we started to look at something we're calling converged commerce. The idea is that online, off line, mobile, social all start to converge around commerce and create a very different shopping experience. Social shopping / social buying is a critical element of this new converged offering. (We plan to talk more about converged commerce at a breakfast briefing on March 2, 2011 in Burlingame, CA). One of my favorite examples of what the new shopping experience might look like goes something like this: "My daughter walks into a clothing retail store, let's say Urban Outfitters, checks in on FourSquare (or perhaps the store network reads a RFID tag in her phone and checks her in automatically). The check in triggers a response from the store network, recognizes her as a frequent shopper and loyalty program member, automatically showing her current loyalty status and any special offers / coupons on her mobile device. The in store network also automatically alerts a clerk of her presence. She finds a pair of jeans she likes and reads the barcode or QR code with her phone which checks her Facebook friends buying history to see who has previously bought them and showing her several friends pics wearing the item. It also checks Facebook to see if there is an available group discount. She is sent a message from Facebook that the item is available through the virtual Urban Outfitters Facebook  store at a substantial discount. She proceeds to try on the pants, snap a pic which she shares with some of her Facebook friends by uploading it to Facebook and getting immediate responses / recommendation from any that are online. She decides she'd like a pair but before she finalizes the transaction she runs the barcode on an app like Redlaser to see if it's available somewhere else online for less, like say Amazon. If it is she purchases it from the online store, having it shipped to her and puts the item back. but if it's not, she completes the transaction with Facebook Credits online or in store using her phone and near field communications (NFC). The store is alerted that the transaction is complete and she takes the jeans home".

From my example there are a bunch of different implications for the new commerce experience. The store becomes an extension of the virtual store and vice-versa. The store is also one potential fulfillment method but only one. Coupons are embedded in the process rather than going to a Groupon or LivingSocial like site. Those sites could actually become a part of the system though, or could be taken out of the equation by a network like Facebook (which may be one of the underlying reasons they're testing the current offering). The mobile device is critical to the process as is the ability to seamlessly connect to and interact with her social network. The mobile also provides the location data that enables the store to interact with her in real time and with NFC can complete the transaction. For the brick and mortar store it's essential that they grow to include the online part of the experience. I read somewhere that Best Buy attributed apps like Redlaser and the ability to comparison shop in the store to online alternatives with a loss of revenue this past Holiday season.

Where is Facebook going with its current test, I'm not sure, but it's not hard to envision a much deeper role for the Network in a rapidly evolving shopping experience. I am convinced that social will be one of the key components to the new shopping / commerce experience.

Tags: shopping, Facebook, social, commerce, convergence, mobile, internet of things, location based, FourSquare

Designing User Experience

It's 2011 in case you've already forgotten and the world is changing; okay, I guess it's always changing, just now though, the pace of change has rapidly accelerated. You can see it in your personal life and the change cycle is impacting businesses in ever increasing numbers. The transition to an information economy in a post-industrial world gets a lit of credit of course but there are also a bunch of intersecting trends that have helped feed the change cycle. The Internet has and is creating a hyper-connected world where we nearly always online and interact in real time. The Web 2.0 movement taught us online social and created new expectations and habits. The Internet enabled two critical things, online content creation and online communities. The socialization of online content creation, distribution and curation is disrupting "traditional" media. Moving community online taught us new definitions of relationship and changed our expectation of how, when and who. The Internet does away with distance and eliminates barriers to frequent contact. Here's a simple example, my birthday was yesterday. In a non-connected pre-Internet world how many physical birthday cards would I reasonably expect to receive? 10, I think that's pretty optimistic, but let's say 10. Now in a connected Internet world how many people wished me happy birthday yesterday? On Facebook alone over 100 people and quite a few more (~30) on Twitter and even a few on email. By the way, I did still get 1 birthday card...my mom (well, actually she told me she sent it, I haven't made it out to the mail box yet, usually nothing but snail spam these days, everything else is online).

So things are changing and expectations of how, when and where we interact is high on that list of change. As an Internet user my expectations of the tools I use is quite a bit higher than it was only a few years ago. As a social customer my expectations of the businesses I interact with has also changed and when that interaction doesn't meet my expectations, at least over some reasonable period of time, then I move on to another supplier. Some businesses are starting to understand this and the social CRM movement is gaining momentum. With that momentum comes new tools and processes for creating and executing in an ongoing model positive customer experiences. Commerce has resurfaced as a focus (or what was called eCommerce) for many businesses as we start to create customer experiences that blur online and offline in a converged commerce experience through the use of mobile, Internet of things, Near Field Communications, social and hyper-connectivity (including ubiquitous connection to social networks).

The way we interact with tech has also changed. Apple redefined the user experience (UX) for mobile smartphones and tablets and now anything less is just not acceptable. Apple also redefined the way we interact with digital content, first for music with iTunes and then with apps themselves with the iPhone and Mac app stores. The apps themselves are extending this UX concept to other types of digital content and other tasks. This innovation, masking complexity in simplicity, is key to a positive UX.

Web applications, particularly Web 2.0 sites and apps, also exhibit the design concept of simplicity on top of complexity. Facebook, Twitter, Quora, Flickr, YouTube and many others demonstrate this concept. What was acceptable in software design, hardware design and web design only a short time ago is not acceptable today. Our expectations are higher, the bar is higher and our level of independence and empowerment is so much higher that an experience we might have tolerated in the past now causes us to move on.

Enterprise software, while slow to react to this driving force to modernize the UX, is not immune from this phenomenon. There are a lot of legacy apps in our businesses and frankly, many of those apps will not be changed out for many, many years to come. New apps, of course, are starting to incorporate modern design and design concepts but for the old we need some sort of way to put a new face on them. I think the growing popularity of activity streams like SocialCast, Novell Vibe and Salesforce.com Chatter might provide one avenue for refreshing the enterprise UX. There is also a good case for some new offerings that could be used to harmonize and refresh legacy apps by providing a modern UX layer on top of existing systems.

I've looked at a couple of examples of modern UX's over the past year. To develop them the vendors have invested heavily in new technology and R&D to build in the level of simplicity and usability. Eye tracking technology, for example, lets developers work with a blueprint that can significantly enhance the user experience. This is a fairly new approach and much of the tech to support it has been home grown but I recently found a start up, gazehawk, that has a cloud based product for capture and analysis on apps, web pages and ads that leads to improved UX design. This should be a hot market over the next few years as more vendors try to modernize their UX. Two vendors, Oracle with it's new Fusion Applications release and Workday, stand out to me in UX, although this is not an exhaustive list, but a small sample of what is possible. In both cases the products were engineered from the ground up with UX as a central design concept and the result is quite stunning. User feedback is very positive on both and in fact there seem to be significant productivity gains when UX is central to design (although I'm inferring this from what I've witnessed, not through a formal research study).   

Designing business process and technology with UX as a central design concept is critical for success in 2011. Building experiences that are simple and clean on the front and mask complexity in the backend is key. It may seem odd to mix hardware and software design concepts with business models but the same concept applies to all three. The same expectation and desire drives both.

Tags: user experience, UX, simplicity, Novell Vibe, Chatter, SocialCast, Apple, Oracle, Workday

The Left Over Prediction for 2011, Winning the Local Wars

The process of coming up with predictions each year is an interesting one. It involves a lot of brainstorming and idea pitching of course, and in the end quite a few ideas end up on the "cutting room" floor. Now there are some pretty outlandish things there to be sure, but often some very good ideas don't quite make the cut...or more often the idea doesn't quite jell. You can feel strongly that something will happen, but sometimes the "what" doesn't exactly work. One of those ideas is related to hyper-local, mobile, context awareness and how to "win" in the local market. The technology to build a solution is available and several companies are trying to attack the problem (and from many different angles) but nothing seems to have clicked yet (no pun intended).

In the old days, you know, prehistoric times before the Internet, the Yellowpages was really the local vehicle of choice. It was the place people went to find a new local service / business and ads in it offered the highest hit rate. Radio and newspapers also had their share of followers but behaviorally when a person wanted to fine a new hair salon there was the Yellowpages and word of mouth. That was then, now, where do people go for the same information?

Social networks are the new word of mouth (along with actual word of mouth of course), but the Yellowpages replacement isn't so clear. As a side note, you know I was really surprised to see a huge Yellowpages book (yep, a real paper thing) leaning against my door recently, I promptly put it in the recycle bin where it belongs. Anyway, a culture shift from Web 2.0 has made the format of a Yellowpages (I mean, there are online Yellowpages) outdated. A business generated directory isn't really that useful today in a world that looks for customer generated ratings and reviews. I mean why would I trust the hair salon's ad that says they're the best when I can see what their customers say about them? Online there are two types of ratings / reviews sites, those that provide directory-like information like Yelp, and those that provide the directory AND a direct connection to the business (for the most part restaurants), like OpenTable.

Mobile is having a huge impact on what might happen with local as well. At the most basic level having some way to connect individuals to businesses based on location and context is a powerful concept. There are several active attempts to leverage location and mobile, FourSquare, Gowalla and even Yelp. FourSquare added a game paradigm that has created some engagement for users but has fallen short in enlisting businesses in the "game". If there was more incentive to participate from businesses then maybe there would be more engagement from users. All of these location based mobile services have gained some following but to me they don't go far enough with context and, other than Yelp, haven't captured enough mind share from businesses. There are, for example other context clues that could be used, the simplest being time of day and day of week. If I'm in a downtown area of restaurants at noon on Monday there's a good chance I'd appreciate an offer for 20% off lunch somewhere near by. And more over if I often check in to Sushi restaurants on Monday around noon then the offer of 20% off to a nearby but different Sushi restaurant might just be something I'd appreciate. It's about mutual benefit, the more relevant the offers to me as an individual the more likely I am to make use of the offer, which in turn is good for the participating businesses. Context can be inferred from behavior and behavior can be influenced by context and relevance.

Yelp is a special case, they've been around longer and they have, at least to some degree succeeded with both users / customers and with businesses. They have a local sales force that has been fairly effective in reaching businesses. They also have done a great job of building following through a community of users / reviewers. With the addition of location last year they are a strong player. They could, however take context into account in making recommendations and could significantly improve their value to the user.

Augmented reality (overlaying information onto the real world based on location) mobile apps / services also offer some potential for the hyper-local market. There are a bunch of AR apps for everything from astronomy to local tips. GrafitiGeo, for example is like an AR wiki that let's users leave graffiti in locations for other to read. One of the newer and more interesting from a local business standpoint is GoldRun, an app that provides AR treasure hunts to it's users and is linked to Facebook. The user gathers virtual items and turns them into rewards, which in turn drive traffic to online and brick and mortar destinations.

All of these technologies are a part of a new approach to commerce that combines mobile, Near Field Communications (NFC), eCommerce, etc, something we're starting to cover as converged commerce. There is a predictions that made the list this year so I won't go into it here but certainly this is a part of the approach to hyper-local as well.

Promotions historically have been an important part of drawing in and retaining customers. As you can see from what I've already discussed above the new commerce and the approach to hyper-local is no exception. Context based offers and promotions are a very interesting way to use new technologies to drive traffic. Physical coupons placed in newspapers or direct mail are still around but seem arcane. I throw away piles of them every week.  This past year saw the very rapid growth of business that provide online offers, Groupon emerging as the leader by a fair margin. Groupon, in fact is somewhere over $1B in run rate and reportedly plans an IPO this year.

As you can see there's a lot of activity around getting to the local markets.  In addition to the start ups I mentioned above Facebook, Twitter and Google have not been idle in this market, each launching a competing product. Google in particular has a vested interest in sorting out and getting into local advertising. This is the one area that up to now, they have made relatively little progress. Over the last year they have had two failed attempts to buy into local, first with Yelp and later with Groupon. Now with they own offering, Google Places with Hotpot and an android app and a newly launched iPhone app, they seem to have settled on trying to leverage their own assets and talents to make a run at local this year. Google's opportunity, tied to it's strength in search, could prove compelling to businesses and they have the added advantage of being the aggregator of other relevant content from Yelp, Zagat, OpenTable, CitySearch and others.

So what's the almost prediction for local this year...I don't know. As you can see, there are vendors coming at this from all sorts of directions and some have a great deal of promise. What will work, or better yet, what combination of the above will capture the minds of both users and local business owners? I'd expect to see a lot of consolidation this year, with both smaller vendors merging to gain broader functionality and some larger vendors buying up the smaller in an attempt to offer something more complete. Google and Facebook have the funds and the interest, as well as the need to capitalize on the opportunity while it's still up for grabs. I guess what I predict is that it will be an interesting year to watch this hyper-local market and by the end of the year, we'll have a much better picture on what will win...okay, I guess that's a pretty wimpy prediction, but it's all I have so far...

Tags: local, ad, AR, social, mobile, Google, Yelp, FourSquare, Groupon, Facebook, context, location based, hyper-local

Top Ten Predictions for 2011

This post is built from our annual IDC group effort to lay out ten predictions. The actual document should be up on IDC.com in a couple of weeks, for those of you who have a subscription anyway, so if you want to learn more about any of the predictions I'd point you there, it has a lot more detail than this post. The team this year (besides me) includes: Erin Traudt, Mary Wardley, Scott Guinn, Robert Mahowald, Amy Konary, Melissa Webster, Sanjeev Pal, Darren Bibby, Christine Dover, and Steve White. 

So on to the predictions; 2010 was the year of moderate business recovery as the world moved slowly out of economic recession. The software trends we identified last year have matured, thus creating a far reaching wave of change throughout the enterprise. It also laid the foundation for a redefined software industry.

In 2011 several core trends will continue to drive change for businesses and for the software industry in general. Cloud computing, which has already been established in application markets, is gaining momentum up and down the enterprise software stack. Cloud is also a key enabler to many of the other trends. The enterprise is moving along in it’s change to a more social business, both externally with customer and partner initiatives and internally with new ways of empowering collaborative work. Social data, analyzed through new socialytic platforms is growing in it’s ability to influence executive decisions. New business models are starting to emerge that combine hyper-connectivity with cloud computing, enterprise mobility, and social software to create a people-centric / organic business network and new approaches to commerce are creating opportunities to dramatically change the customer shopping experience.

We believes that 2011 will see the expansion of business change that had already started in spite of a languishing economy, driven by the new social customer, empowered employees and a convergence of new technical capabilities. This business change cycle will challenge the enterprise but will offer many new business opportunities. The required underpinnings for these business changes will, we believe, offer technology vendors significant growth opportunities. We also believe that 2011 will be a year of M&A activity as the software industry continues to consolidate while also seeing the re-emergence of a viable IPO market. With these factors in mind we see the following key trends for 2011:

1. Social profiles become the Internet fingerprint

2. The resurgence of eCommerce, increasing importance of providing a social customer experience, proliferation of context aware mobile apps and emergence of new social tools will lead to an innovative commerce experience that is a hybrid of social, mobile, online and brick and mortar.

3. Cloud and the economic impact of new subscription models is reshaping the software channel model for vendors and their partners.

4. The enterprise gets serious about mobile applications, moving to more open and secure mobile platforms that provide multi-device management and much broader mobile apps deployment.

5. Hyper connectivity and cloud computing leads the social business to the next generation business model based on organic business networks.

6. Social collaboration and networking tools bring new life - not death - to email.

7. Socialytics moves from enterprise experiment to core business intelligence tool in support of critical executive decision making.

8. The growth of social media and meteoric expansion of  content causes a data glut that can only be made relevant through people-centric curation, leading to an explosion of tools and methods to facilitate the process.  

9. The AppStore software distribution model and subsequent disruption of pricing models leads to lower software costs and more transparent software pricing.

10. The changing nature of work drives new solutions for collaboration, project management, and managing a distributed and often indirect (contract) workforce (the Human Cloud).

That's our list, what do you think?

Tags: predictions, 2011, social web, web 2.0, e2.0, AppStore, collaboration, networked business, socialytics, human cloud, curation

Google, Microsoft and the Department of the Interior

If you weren't paying close attention you might have missed this ruling on Monday, I mean it was the first day back after the holiday break. It's worth taking a quick look though, as I think it could have some important implications for the software purchasing process and competition in Federal Government agencies. Last October Google filed a suit against the Department of the Interior alleging that the Department had illegally manipulated the contract bidding process in favor of Microsoft's Internet based email solution and excluded Google's gmail and productivity apps solution by including a requirement for Microsoft's Online Productivity Suite in the bid. The contract, a part of the Federal governments move to web based applications, was for web based email and collaboration for ~88,000 users, totaling ~$59M. Judge Susan Baden of the US Court of Federal Claims issued a preliminary injunction against the Department, agreeing that they had violated federal contracting rules. The injunction orders the Department to redo the bidding criteria in such a way that competition is encouraged and non-Microsoft solutions are not excluded. In her order Baden found that Google would probably win on the merits of the case and would suffer competitive harm if the injunction was not issued. Baden also said the injunction served public interest by encouraging open competition.

Over the last few years Microsoft's strong hold on federal email and productivity software has been challenged by Google's cloud based solutions. In general Google has made significant efforts along with it's resellers to challenge Microsoft in the collaboration and productivity markets in both public and private sector. The Federal governments directive for agencies to move to cloud based solutions and away from government managed data centers has only fed this competition of late. Federal contracting rules are very restrictive and designed to encourage open competition but it has long been agency practice to use specifications to "favor" certain suppliers. Microsoft specifically has benefited from this practice, remaining the default choice for most agencies. This ruling strikes a strong blow to that practice and opens up opportunity for Google and other suppliers as the agencies move to the cloud over the next few years. Other "standard" tech products could also find themselves in a much more competitive situation on future contracts because of the precedent.

The decision isn't a final ruling and the Department could try to fight Baden's decision but it is unlikely that she would reverse her opinion. It's more likely that they will simply re-bid the contract with the more open specifications. Google's offering is very competitively priced and has the potential to prove a strong competitor to Microsoft in a head to head contest. I should also note that Baden did not find any evidence of bad faith or wrong doing on the part of Microsoft.

Keeping Score: Exit Activity for Venture Backed Companies in 2010

Not surprisingly in 2008 and 2009 exit activity for venture backed tech companies was very slow. Last year that activity seemed to have picked up, mirroring the overall improved business environment. I try to keep track of most of the tech M&A and IPO activity, especially in software and Internet sectors but I hadn't really done a tally of VC backed companies and my curiosity was peaked today by a post on the Wall Street Journal blog. Doing a little more research it seems that M&A activity for 2010 was almost double 2008 and 2009 and IPO's came in at near 5X the prior year. According to Dow Jones there were 62 acquisition of web based start ups totaling a little over $4B and 46 VC funded companies with an IPO. In fact the total exit activity, around 514 companies total, is near pre-recession 2007 numbers. The activity is encouraging and a good measure of the extent of the recovery of course, but it also is interesting for other reasons. Not only did the deal flow volume increase but there was a shift in acquiring companies. In 2009 Oracle led the list, acquiring 5 VC backed companies but fell out of the top 10 with only 2 in 2010 (not surprising considering the level of attention it needed to close and integrate it's $7.4B Sun acquisition). In 2010 5 would not get them the 1st place slot however. The following chart shows 2010 leaders (source: Dow Jones VentureSource):

As you can see Google was by far the most acquisitive company, doubling both Facebook and IBM. Google had signaled as much in 2009, when CEO Eric Schmidt stated that they were planning large and small strategic acquisitions for 2010. Aggressive acquisitions in this case mirrors an overall more aggressive Google, looking to expand beyond it's ad-based businesses into other adjacent areas. What did it acquire:

Mobile: Remail (mobile email), AdMob (mobile ads), Simplify Media (desk top SW for mobile music management)

Video: Episodic (although this could be mobile as well, online video management platform)

Ads: Invite Media (display media sales platform)

Social:  aardvark (human based crowdsourced answers), Metaweb (Freebase, entity graph of people, places and things - Google uses for improved search results), Slide (community driven entertainment), Jambool (Social Gold - virtual goods monitization platform)

eCommerce: Like.com (visual shopping search)

(Note: includes only VC backed deals that closed in 2010)

Absent from the list, Google's 2 high profile attempts to get into the local market, first with Yelp and then with Groupon.

Another sign of changing times, 2 of the top 4 acquirers are VC backed themselves, Facebook and Zynga...a testament to how hot social remains.

So what's in store for 2011? More IPO's for sure, 44 companies have already registered, which is almost double the number this time last year. Also Facebook has been clear that it plans to be an aggressive acquirer this year, so they might give Google a run for first, although I don't expect them to slow down either. As for as hot areas, I think there will be quite a bit of consolidation among social start ups, both among themselves (mid-size companies filling out product portfolios) and larger companies getting into the social business market. I'd also expect to see activity in mobile and in commerce. In particular I think companies will look to build out new commerce experiences that include merge online and physical, and include social, mobile and context aware elements. All in all there's enough momentum that 2011 should far exceed 2010 in both M&A and IPO's.

Tags: M&A, venture, VC, mobile, social, Google, Facebook, Zynga, IPO