Monday 19 February 2007

Online opinion gives power to the people

IT’S not out in America until June but already some consumers reckon that Apple’s iPhone is passé.

According to some of the complainers on Digg.com, a social news website, the iPhone “can’t live up to the hype”, and Apple boss Steve Jobs and Co “don’t produce good tech, they produce good marketing”.

But Smaran Dayal loves the look of the iPhone. An 18-year-old from Pune, India, Dayal says Apple’s iPod and Macintosh computer were revolutionary products and he has “a very strong feeling that the company has done it again”. That’s good news for Apple, because Dayal has a big voice on Digg, a site that claims 20m visitors a month.

Digg, like other such websites including Reddit, Newsvine and Stumbleupon, relies on users like Dayal to create its content. Browsers send in links to stories they have found on the web or submit their own. Users then vote for the stories they most like and add their comments; those that get the most votes make it on to the front page. Once there, the stories attract more attention and more votes, and so the comments snowball.

Last week’s most popular stories included one about the closure of three schools in Phoenix, Arizona, after a student reported seeing a person dressed as Batman run across campus.

But they are also a forum for consumers to review new products. What marks these sites out from other aggregators of online content such as Google or Yahoo is the ranking of stories and the active, vocal nature of their users. Social networks mark a new chapter and a new challenge for consumer-goods firms.

Dayal has 500 “friends” who track his Apple stories, ones he writes himself or ones he finds on other sites and adds his comments to. So his recommendation carries a potential 500 votes — a great start for a story and enough to propel it on to the front page and to a potential audience of millions.

Jenny Gormley, a co-founder of the UK consumer website ProductSifter.com, which uses specialist journalists to review products, said: “A study commissioned by Yahoo last year found that 77% of consumer electronics purchases are now influenced by internet research.

“Moreover, it found that the more expensive the product, the more time people spend researching it on the net. On average people spend 12 hours researching online. It jumped to 15 hours for expensive products such as televisions.”

Search Digg for, say, stories about the Nintendo Wii console and it throws up a plethora of information, with hundreds of comments from Digg users.

One story about an executive from rival Sony dismissing Wii as “an impulse buy” has so far attracted more than 270 comments, most of them attacking Sony. Digg’s users criticise the cost of PlayStation 3, the limited number of games and the company’s perceived arrogance.

Hideki “Dick” Komiyama, president of Sony’s US electronics operation, has identified customer feedback on the net as a key area in the digital age. A Sony spokesman said it was increasingly looking at sites such as Digg for feedback, as well as research and development and marketing ideas. “It’s one of our major initiatives,” he said.

Dell, the computer giant, is arguably the company to have so far received the most spectacular internet kicking. In 2005 blogger and media commentator Jeff Jarvis triggered an avalanche of criticism of Dell’s customer service after his $1,600 (£820) computer went wrong. The company’s share price took a dive after the story was taken up by similarly dissatisfied punters across the internet.

Michael Dell, the founder, recently ousted his chief executive and retook charge in an attempt to turn round its customer service.

“The Dell story wasn’t about me standing up to Dell at all,” said Jarvis. “It was a demonstration of the ease of coalescence on the internet. There were thousands of people who saw that story and said ‘me too’.”

Jarvis said social news sites served to amplify those “me too” stories, making sure more people knew about problems faster.

Ford’s publicity for its 2008 Taurus was lampooned with a mock-up advert and nearly 700 mainly derisory entries about the new car and the original.

Consumer opinion has always been important to companies. But the feedback has never been this large or this loud.

With the growing popularity of these sites, there are inevitably people trying to play the system to their advantage. One website, usersubmitter.com, pays people to submit stories, and pays users to give them the thumbs-up.

But Jon Aizen of Dapper, a company that designs software to track information on the web, said: “Digg claims to have mechanisms in place that stop people gaming the system, and the community backlash against anyone found doing it would be huge.”

Jarvis said: “People feel they own these sites in a way they don’t feel they own traditional media. Companies can’t control the debate any more.”

Dayal will have to wait until 2008 for the iPhone to come out on the subcontinent or pay $1,000 for a grey-market import. “I’m saving my money,” he said.

Apple had better hope he likes his iPhone once he gets it.

Content provide from :http://business.timesonline.co.uk/tol/business/article1400246.ece

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