Implicit is the New Explicit

There are more opportunities to take advantage of content then to create it yourself

Taking advantage of existing user generated content (UGC) can be more far-reaching and impactful than trying to generate new UGC from scratch.

There are a lot of new startups that coin themselves as “Web 2.0” and are focused on creating user generated content. These companies try to get people to come to their site and create content in order to create a community, as well as to increase page views and uniques which invariably capitalizes on their advertising business model. There are impressive players in the explicit UGC space, including brands we all know like Facebook, Digg, Yelp, TripAdvisor, Flickr, Slide, and RockYou. Some of these sites are really good at linking people (e.g. Facebook), helping you find UGC through search (e.g. YouTube), and search engine optimizations (e.g. Digg, Yelp).

All these sites written up on TechCrunch have essentially the same mission – obtain a ton of users to come to the site to create original content that cannot be found elsewhere. Think of a Web 2.0 company and there is a high likelihood it fits the description above.

But (and this is a HUGE ‘but’) these companies are not taking enough advantage of the content that already exists on other sites. Given the trend towards openness of data, this content obtained from other sites is implicit information that can be easily indexed (across thousands of these sites) and then be compiled.

Moreover, there is a growing amount of content being created on niche sites like forums, blogs (and blog comments), and discussion boards. While few of these niche sites will become big businesses, in aggregate they contain a lot of valuable content that can be mined and processed.

Zillow, Trulia, and real-estate aggregators focus and rely on implicit information and data. Travel search (e.g. SideStep) is also implicit-based. And the most dominant player on the Internet, Google, is implicit – search engines don’t create their own content but instead rely on the content of others.

In order for traditional companies that focus on explicit UGC to be effective, they often need to build a walled garden. Because the content is proprietary to their site, they lose out if users are leaving their site. They don’t want to make things open. Some explicit new wave companies (e.g. Twitter, Flickr) have bucked that trend by being open, but most are closed in Web 0.6 Prodigy-style.

Let’s take a look at one of my favorite sites: Yelp. Yelp is awesome and has done a great job encouraging people to write explicit reviews on their site. If I was going to build a competitor to Yelp, I would not compete with them on gathering explicit reviews but would instead gather implicit information on local restaurants. You can gather this information from other review sites like the San Francisco Chronicle, government agencies that rate the cleanliness, legal databases that document lawsuits, and more. And restaurants and other brick and mortars have great identifiers – phone number and address – that are usually unique and therefore easy to find and collect information.

The other problem for companies collecting explicit UGC is that they encounter a huge marketing problem and therefore must have a gargantuan budget. This is why all these explicit companies are raising large capital rounds (often over $25 million) right now. They also require a real skill at viral tuning, street marketing, or search engine optimization (and often all three). If you are really good at marketing, then you should create a company dedicated to getting users and having them generate content.

Implicit companies, by contrast, encounter a huge technology problem and their budget is focused on building out that technology. If you are a technologist then you should be opting to take advantage of content on other sites. That is, of course, what makes Google so successful.

If you’re neither the marketing guru nor the technologist, you might want to sit this new technology wave out and watch from the sidelines as implicit companies will benefit from and give benefit to its explicit counterparts.

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