While you could argue that blogging in general has crossed into mainstream based on the number of visitors attending top blogs, most visitors don’t know that what they are visiting is called “blogs” though. After speaking with one individual last night, I’ve concluded that some people will just never get involved in social media or take advantage of the many tools at their disposal.

The Inner Circle

I’ve realized that much of social media is really an inner circle. A large portion of these readers participate in the conversation on Twitter, Friendfeed, and other platforms are part of a relatively small yet influential circle. While that circle continues to expand, I’ve begun to wonder if the majority of individuals will ever become highly active in social media outside of Facebook and mainstream social networks.

When Charlene Li wrote the book “Groundswell” she highlighted Forrester’s social technographics profile and the various categories. The six types of categories are creators, critics, collectors, joiners, spectators, and inactives. The “joiners” do nothing more than participate in social networks for the most part. The spectators and inactives do even less. A whopping 44 percent are inactives.

I rarely think about how disconnected from reality I am but after talking with one person last night I definitely realized it. There’s a group of people that require an alternative form of communication to have what is ultimately “inside conversation”. This morning I concluded that much of this conversation amounts to what is secret code among fraternities.

The average person doesn’t understand what one is talking about (for instance when referencing “Twitter”), but the few active social media active participants are the only one that knows what’s being discussed. When the conversation is outside of the mainstream, is there any way for the conversation to eventually become mainstream?

Yesterday afternoon Digg announced that they had secured yet another round of funding. This new round is for $28.7 million. Two things come to everybody’s mind: what are they going to do with all that money and did Kevin and Jay take some cash as part of this round? Is the company prepared to release the latest cure for cancer? Probably not.

I’m giving Digg a hard time. I mean Facebook was able to raise almost half a billion after all their rounds of funding right? While the site attracts over 20 million monthly users domestically and even more worldwide, the site isn’t exactly at the early stage of their growth. Are they? The site is preparing to launch support for the Facebook Connect service and they’re hoping that this helps transform the service and attract a broader audience.

Perhaps the site will become the social voting site for absolutely everything, not just news. After four years of operations, a lack of profit, and many unsuccessful exit attempts it appears that the next best option was to go for funding. I have to give it to the Digg team, they have some serious cohones! While I love using the site to find the latest tech news, I’m just not sure that the service is transforming the world the way that $40 million in total funding should.

Perhaps this is all part of the Web 2.0 mindset though. Give a lot of money to people that are building services that help us organize the nearly infinite information on the web. Do you think this round is justifiable? What do you think they could possibly be using all this money for?

If you’ve gone to any of the industry conferences in the past year, you’ll have heard the same pitch from all the companies: “We’re selling engagement.” We understand that there is inherently value to brands when consumers engage in various activities within a branded environment. How much value is provided through that engagement? Nobody knows. How do you measure engagement? Also an unknown.

New Solutions Emerge

Last week news of Facebook’s new “Engagement Ads” emerged and at first it didn’t click with me but the sound of it is pretty ominous. Today MediaPost posted an interview with Facebook’s VP of Media Sales, Mike Murphy in which he says “Over the last few years, Web advertising has been all about demand fulfillment.”

The article continues, “he believes that Facebook users aren’t necessarily seeking to execute tasks or fulfill specific demands, and by nature are less inclined to click on ads that take them away from the site.” What Mike Murphy believes is something that isn’t theory, it’s fact: users on social networks do not click on advertisements and this is why Google continues to reign in the majority of online advertising dollars.

Direct sales is what advertisers want and it’s not surprising. When you can put in money into specific advertisements and you can track that advertisement to a sale, why wouldn’t you purchase more or look for other channels that can do the same thing? That’s what most are doing, but a few brave souls are beginning to explore new territory.

Engagement Advertising as the 4th Type of Web Based Ad

You are a brand manager. You are sitting at your desk trying to process a ton of data and make a decision about the next quarter’s advertising budget. You have a bunch of options including: television, newspaper, radio, mailers and online. Online is broken out into banner advertising, search advertising, email marketing, and more recently “social media” which nobody has figured out how to classify it.

If Facebook agrees with what many others are saying, the new categorization should be “engagement advertising”. Meebo has already been offering these types of solutions (as they will discuss at the upcoming Social Ad Summit) and a number of others are beginning to do the same. Ultimately all engagement advertisements boil down to one thing: the conversation.

In public relations, marketing and advertising firms there have been a number of solutions to track buzz such as Cymfony and Nielsen BuzzMetrics. These new “engagement advertisements” ultimately produce similar results. At the end of the day, Meebo or Facebook will come back to the advertiser and say “X number of people interacted with your advertisement and Y number of people are now talking about your product in comparison to Z people before.”

Still Very Early

Just as brands are cautious to enter this space, social media evangelists should be equally concerned about this hesitancy. While we alway have “attention economics” to rely on, soon enough every social media site is going to be pushing this new type of advertisement. The only problem is that the industry is still learning how to measure all of these things.

Metrics is not a new phenomenon, it’s just that technology has made it easier to measure things. Unfortunately all of us are trying to figure out ways of packaging and measuring this “new type” of advertising while at the same time selling it “as is”. Fortunately for the industry there are brands that are willing to experiment and test the waters but the windfall profits we are seeking from social media may no longer be just over the horizon.

Rather than just measuring the impact of advertising on direct sales we are now entering a phase where we monitor the impact of advertising on conversation. While there are already systems in place to monitor the conversation, it was previously challenging to influence the conversation on a large scale. What social networks are now providing is a way to influence consumers’ conversation en masse.

The real question now is: can influencing the conversation on a large scale result in sales? If it can, how do we measure the correlation between conversation and sales? Is this really the secret key to social networks generating large amounts of revenue?

Hey this is Nick O’Neill and I’m here today to tell you about ….. me!!!!!! Yes, I am wonderful [END CLIP].

That’s about all I and thousands of others of people can seem to talk about when they are provided with 12 seconds to talk to a video camera. There is a sudden boom of social video services that enable people to record and upload quick video clips of themselves. I’ve found that the majority of the content is simply people talking about themselves. Is this a particularly acute observation? Not really, if you didn’t realize this then you haven’t been viewing social media.

Social Media is Narcissistic

When I was waiting in line today to grab my Chipotle lunch I thought to myself that I’d post a tweet saying “Exhausted. Didn’t sleep much last night.” I’m not sure what exactly inspired this moment of deep insight but I can guarantee that absolutely nobody following me on Twitter cared whatsoever. They will simply ignore it in search of the next interesting post.

The problem with many of these services is that they were designed in ways that enable us to increase our narcissism. Who posted on my wall on Facebook? Did you comment on my blog post? Did you reply to my tweet? Me me me! In such an environment it’s no wonder that micro-celebrities are born because ultimately the only industry that rewards narcissism is the entertainment industry.

Where’s the Value?

It’s well known that advertising appeals to peoples’ desire to be a celebrity. When an industry develops tools for individuals to become their own celebrities, people rush in to take advantage of it. That’s exactly what social media has provided but hopefully some of these tools can turn into tools for good rather than simply tools for self promotion.

The only thing I can’t figure out about 12 seconds (and countless other “social media” start ups) is how are they any different from YouTube or most other video sites? Does 12 seconds really make much of a difference? Honestly, I think it’s relatively limiting and while I understand the 140 character limit for Twitter I have no idea where the value is for 12seconds.com.

How large can the industry get when people are only talking about themselves?

At the beginning of June I announced that Disqus had “out opened” my comments. While the service made a lot of sense, I still refrained from adding the service for one primary reason: I couldn’t keep a local backup of my comments. In their most recent version, Disqus has resolved the problem and now users can maintain a local copy of comments while taking advantage of the Disqus tool.

I previously suggested that one of the primary reasons that I liked Disqus was that comments posted by users showed up in FriendFeed. Theoretically, I could import a feed of comments on my site but this way, the comment will show up twice: once from my site and once in the user’s feed. Is there any other benefit to using Disqus? Well, one other feature that I find to be useful is threaded comments.

Additionally there is supposedly better spam filters. I have yet to test the system for long enough to know but I’m guessing the company can back up their claims. Finally, being able to reply to the comments via mobile makes things a heck of a lot easier for me. While I could have logged into wordpress and then commented on my site previously, this service makes things quick and easy.

Aside from that I have yet to figure out any other reasons to add Disqus. It has a nice design and it has worked so far so I’m sticking with it for now. Have you used Disqus? Is there any disadvantages of the service? Are there any benefits that I’m missing here?

Last night Twitter announced that they had turned off SMS notifications in countries outside of India, Canada and the United States. This means that when you update your Twitter status, not everybody will receive notifications via text. Personally, I turned of SMS notifications all together long ago. I learned my lesson after I ended up following someone who tweeted religiously resulting in hundreds of text messages a day.

ln other news, Russia appears to be expanding their presence in Georgia even though they called for a cease-fire. Now back to Twitter news. So why has Twitter shut down SMS abroad? Simple: it was getting too expensive. As Biz Stone explains:

When we launched our free SMS service to the world, we set the clock ticking. As the service grew in popularity, so too would the price.

Our challenge during this window of time was to establish relationships with mobile operators around the world such that our SMS services could become sustainable from a cost perspective. We achieved this goal in Canada, India, and the United States. We can provide full incoming and outgoing SMS service without passing along operator fees in these countries.

We took a risk hoping to bring more nations onboard and more mobile operators around to our way of thinking but we’ve arrived at a point where the responsible thing to do is slow our costs and take a different approach.

What does this mean? Well you simply won’t get text message alerts. While this was one of the core features of Twitter, if you actually began using the service regularly, I would guess that you ended up turning this off do to it being so annoying. Did you turn of SMS notifications? Have you been significantly impacted by this change?

Last night, it was revealed that Twitter was beginning to place restrictions on the number of users one could follow on Twitter. Apparently the limit was set at 2,000. Robert Scoble didn’t appear to have the same problem though and said that the limit may only be for new users. Another theory? Twitter is throttling the rate at which people add new followers.

While it’s cool to watch a continuous stream of tweets from more than 2,000 users, the real question is there is any use to following this many people. Based on what other people I’ve spoken to have said, following any more than 400 or 500 users is absolutely ridiculous because there is no way to track what is going on. Then again, placing restrictions on what users can do due to theoretical limits doesn’t make much sense either.

Who’s to say that there aren’t more than 2,000 people that I’d like to hear what they have to say? Facebook places a limit of 5,000 friends but even Facebook has suggested that this is due to technical limitations. When you develop a platform, the system should work at all sizes. While most people probably shouldn’t be following the 21,000 plus people that Robert Scoble is, it doesn’t mean you should be able to.

Do you think Twitter should be placing follower restrictions? Do you think these restrictions are a unacceptable as Apple’s iPhone application “off switch” which Steve Jobs confirmed yesterday?

Yesterday one of the biggest news items on the social web was about the del.icio.us site redesign. I was grateful because this site premiered on the front page of the new site driving a substantial amount of traffic this way. Aside from that I wasn’t too emotional about the redesign unlike a substantial number of people who thought that the new redesign was apparently a godsend. Not everybody was ecstatic about it though.

Prior to jumping into the new design and whether bookmarking is relevant, I think it’s important to mention that many people still don’t even know what del.icio.us is. It may be surprising for many readers of this blog but the reality is that most people still don’t use the site. So for the few readers that are unaware of del.icio.us, let me give you a brief overview.

What is del.icio.us and Why Use It?

del.icio.us is simply a bookmarking utility that enables users to keep all of their bookmarks centralized in one place. No matter what computer you are on you can always keep the same set of bookmarks. That’s the primary benefit of using the site. The site can also be used as a tool for social discovery. In fact, del.icio.us was one of the first sites to offer social discovery making it one of the most popular and most hyped Web 2.0 properties on the web.

If you visit a number of aggregation services across the web (e.g. Popurls), you will see the top del.icio.us items included on the site. It is a ubiquitous source for monitoring “what’s popular” on the web right now. That emphasized by visiting the site’s homepage as all of the links on that page are the most recent popular items.

If you haven’t done so yet and are using Firefox to browse the web, I highly suggest downloading the Firefox Delicious add-on. The tool has become my default bookmarking tool and you would be smart to do the same if you haven’t already done so.

What’s Does the Redesign Offer?

If you want to know what the redesign offers, the easiest way is to watch the video below:

As the video illustrates, there have been some substantial changes that emphasize an improvement in usability. The most significant change is that the domain has switched from the immensely confusing “del.icio.us” to delicious.com, making it easy to tell all of your friends how to get to the site (if you ever need to). The other significant changes is browsing sites via multiple tags.

Aside from that, this is pretty much the same delicious.com that you were used to back when it was del.icio.us.

Is Bookmarking Relevant Anymore?

Many people around the web are now asking if bookmarking even matters anymore. Let’s be honest, if you use del.icio.us you probably have over 1,000 bookmarks and still might obsessively bookmark sites that you don’t plan on going back to or may like to later. As Matthew Ingram points out, the unfortunate truth is that most people don’t go back to any of the sites that they bookmark.

I differ from Matthew in that I regularly return to my bookmarks to find a site that I had looked at previously, especially if it is a reference guide. The reality is that most discovery online has shifted for many of us to social discovery. For instance, you may log into Facebook first thing in the morning and see a website that has been shared by one of your friends and you navigate to it.

For those that are on FriendFeed or Twitter, there’s a good chance that you find a large portion of your content through those sites. I know I do. These tools have made the initial forms of social discovery less relevant. Digg, delicious and similar offerings were early attempts at cracking the social discovery nut. Today, it appears that personalized feeds are most relevant and help us find the best content.

I think we are still in an exploratory phase of social discovery and as humans adapting to this digital age we are still trying to perfect the process of social discovery. I continue to use del.icio.us for tracking my personal items on the web, how about you? Do you use delicious? Do you even bookmark anymore? Where do you find your most relevant content?

An interesting trend has started over the past couple days. This weekend Jason Calacanis announced the he was no longer blogging and was instead switching to a newsletter. Initially he suggested that he was limiting the number of subscribers to 750 but soon enough that number was surpassed and there is no sign that it’s stopping. Then today Caroline McCarthy published that Glam Media would be joining the newsletter market.

Blogs clearly have there limits when it comes to revenue and as such most blogs extend into events, as I wrote about the over the weekend. The other model is newsletters and while the majority of people stuck in the social media bubble argue that this in a bad idea due to e-mail overload, my guess is that the average person doesn’t have the same problems that many of the readers of this blog do.

Even if they do have e-mail overload, it’s clear that e-mail newsletters remain to be a viable business model. Just take a look at Daily Candy or Digital Media Wire. Both have developed substantial business models around newsletters and events. The best part of the newsletter business is that once you have subscribers they are much more locked in than a blog where you need to encourage readers to come back on a daily basis.

In the world on new media, developing a sustainable revenue model continues to prove to be challenging. Even still, numerous companies are trying to take a shot at it as the business models for traditional media outlets become shaky. All of this is a race toward what appears to be inevitable acquisition of the best developed new media companies.

Do you think newsletters will continue to be a legitimate business model or do you think the trend is toward blogs and other platforms?

This morning I loaded up Twitter.com and received an error message telling me that the site was not responding. Not the good way to start the day for a billion dollar company. How did I come up with the company being worth $1 billion? I didn’t, my friend Nate Westheimer did. Nate wrote a piece suggesting that a mobile payment system would be Twitter’s ticket to becoming a billion dollar company in a short period of time.

Not a bad idea to be honest, and it is similar to the idea that Facebook has, which is preparing to launch a payment system for their platform. Want to send your friend $5 real quick for the beers they bought you last night? No problem, just text “p biznickman $5″. I hadn’t thought of this solution for Twitter previously, but this makes a lot of sense.

Micropayments are currently an area of rising importance. While I may not text my friends $0.50, I could easily see an API tying into Twitter to transfer small payments for a virtual gift or obtaining access to a premium blog post. While the concept is still foreign to many people, a text based way for transferring small amounts of money makes a ton of sense.

While Twitter doesn’t have a massive amount of market penetration, the site has become ubiquitous among early adopters and making the leap to the mainstream is not far away. So how will Twitter end up making money (if they can keep their site up)? Text based payments if they follow Nate’s advice. Do you agree that a Twitter based payment system would make a lot of sense?