10:05 –

San Francisco (UCSF, South of Market):I am sitting here at Widget Summit 2007 listening to a keynote conversation between Niall Kennedy and Slide founder and CEO Max Levchin on the current state of the widget industry.Slide’s slideshow widgets are seen by over 134 million viewers per month (comScore, June 2007). Slide also authors three of the top four applications on Facebook. Top Friends ranks your friends list and has attracted over 17.5 million Facebook members. FunWall adds some of the most popular features of Slide.com, photo and video customization, to the wall of almost 9 million Facebook members. SuperPoke lets almost 10 million Facebook members send virtual hugs and other expressive “pokes” around their network.

This conversation is great because Slide is at the forefront of the widget industry, defining many of the monetization and audience engagement issues. All comes back to data mining – cookies and anonymous tracking – which is tough when people simply upload what they have looked at, what other widgets interacted with and where widgets came from. 90% from previous instances of that application – that is the viral nature of this distribution. The way that the advertising industry thinks doesn’t lend itself to his analysis.

For Slide, it is a “sales challenge” to present widget style metrics as a basis of valuing impressions and usage. In a light moment Max gave “monkey lovers” as a tongue in cheek example of a demographic which advertisers have expressed an interest for a particular basic cable channel….Max is definitely emphasizing his company’s pioneering experience in monetizing widgets. This topic obviously got the attention of the whole floor. Slide takes a total diversion from classic ad models where advertisers get run of network advertising or third party ad networks insert ads as they choose.

Instead, users define what ads they want, what skins appear, and this is done by working with pioneering brand marketers including AT&T, Activision, Discovery Channel and Lions Gate. Widgets were the fastest path to reach the scale that Slide has achieved – talking about Yahoo! Even Google has taken up to 10 years to get this kind of reach. Slide has achieved this in less than three years.

What about a “user network” around impressions? A personal media network – a successful one at this point – is a system that understands the behavior of users, all driven by going beyond a 400X600 box. Ultimately, widgets are like tiny little TVs, hundreds of millions of them, around the web – little TVs that people click on. The TV analogy works well with advertisers. TV can integrate ad placement into shows via product placement – zero learning curve to discuss in TV terms.

It is the equivalent of sponsoring the chrome around the TV. Let users choose ads and how they appear. That is something that advertisers will increasingly learn how to come to terms with. The trick for advertising in widgets is that the medium is really about the widget that users choose, and that makes the relationship between users and widgets very different from that of users and the banner ads running on the edge of their screen.

Max is repeating the theme of the number of communities his widgets work with, listing of an impressive group of roughly 30 sites with a deft move of the mouse, and then going through what things look like when they publish. For the newbies in the group … the first phase of Slide is characterized as consumer self expression through rich media.Facebook changed everything. It took them a moment to figure out the usage mode of Facebook and how it differs from MySpace, but they discovered that media gathering and media giving – rather than just self expression – are the primary drivers.

He believes Slide figured this out and moved quickly and successfully on this trend. Also, Slide is becoming a clear winner in and by feature arbitrage (Max is giving an example of how Top Friends lets friends filter friends through stating who their BFFs are… a feature that was missing from Facebook).There was a range of interesting innovation both from Slide and from their users that show how innovative the platform can be.

Some applications are being enhanced by value added features, or “Leveled up,” with elements of gaming where users gain points for certain actions and successful interactions within frameworks. Hungarian Jewish composer with credits including Space Odyssey uses his Slide widget product for self expression on their site – taking the conversion to the edge of the long tail.One surprising comment was that Facebook is characterized by “communication through cutesiness” and that many users are “refugees from MySpace” after stating that the ad model is placed squarely in the hands of users and user choice.

Tone was kept up by asking how Max went from cryptography to PayPal to glitter on photos. Max responds well by saying that his goal is to help people and that his #1 criteria is that he has to impact 100s of millions of people, not willing to do anything less exposed to the world – the number of simultaneous people looking at his product has to be staggering to feel satisfied. Also, he is defeating of fraud.

Comscore is portrayed as needing to innovate because they must embrace things like widgets to stay relevant as a stakeholder in the media buying process.Symbiotic relationships with MySpace, Bebo, Facebook explored in depth by the moderator. Max emphasized that “doing good by the users” is the most important – flashpoints like security problems, runaway content, etc. are simply bumps along the road.In the widget industry and for the “widget carriers” that have become platforms – fundamental trend is churn. #1 driver is coolness and “in-thing” – Ryze and other fallen social networks cited.

Blogger used to be the platform to have a blog on, now is all about Word Press and its 16 million users.  People there, need things to do.  Widgets provide the uses… we are shop keeps of the most exciting places in “the mall” - they have the development resources to complement the “malls”.Few widget conference clichés came out in a great overall dialog, however, in the spirit of openness we will share the clichés … 1) Max: Microsoft in 80s – we want to own, you guys do the rest – some mistakes – grabbed by Intuit – thought that was fine for Microsoft because in the end it just strengthened the operating system and “barely scratched the retention” of the windows OS. 2) Moderator: Isn’t this stuff a bit juvenile, with max shifting to citations of usage “we throw 20MM sheep an hour” with a vague reference to utility, citing resume building and job hunting on Facebook.

His closing remarks were pretty interesting, focusing on a TiVo type pitch, talking about the aggregate value of consumer information, how Slide makes sure that they user data remains anonymous, he is an expert at securing information, with the tantalizing thought he can let you know who is on the rise and on the fall with his overall trend data. Specific questions about Slides measurements of clicks within the widget versus overall impressions were not answered directly, focusing on the overall grail of collecting the most monetizable information in advertising via widgets and Facebook apps.

I look forward to the Facebook developers panel at 4:30, which will explore these issues as relate to the worlds most innovative social media platform.