There are two principal ways advertisers are trying to create value for consumers on the web — and they must create value because, you know, consumers are in control. On the web, advertisers can provide entertainment or information. How effective is advertising as information on the web? See Google’s $15B in ad revenue — an $5.19 billion in ad revenue in Q1 2008. The technology of web search enabled advertisers to create value for consumers in a way that was never possible in analogue media.

Facebook has had an update feature similar to Twitter for a while. Now Facebook has a feature that lets users add feeds from other web services like Flickr and del.icio.us — just like FriendFeed. From a technology perspective, Twitter and FriendFeed are now reducable to Facebook features. Even if those two apps are currently more robust than their equivalent Facebook features, there’s nothing to stop Facebook from copying them in their entirety.

Microsoft announced this week that they are going after the holy grail of advertising: integrated ROI measurement and tracking. The big problem with online ROI measurement that Microsoft is targeting is the inability to assign quantifiable value to brand advertising, e.g. banner ads, and which results in disproportionate value being assigned to search advertising — the “last click” which typically leads to a measurable actions like a purchase.

In the networked web era, influentials may not be people with a particularly connected temperament or Rolodex, or people who control and influence monopoly distribution channels (e.g. newspapers), but rather people who influence the network by leveraging the most powerful force on the web — the link. People like bloggers, top Diggers, del.icio.us power users, Facebook users who share lots of links, MySpace users who embed videos, Twitter users who post lots of URLs, or any social network user with links to lots of friends.

Of all the reasons given why Rupert Murdoch decided to keep the WSJ.com paid subscriber wall in place, the one that I find most interesting is that advertisers are willing to pay a premium for WSJ.com’s audience. If the WSJ went free, it would undoubtedly increase its audience substantially, but how valuable would those new visitors be to advertisers compared to the WSJ current niche audience?

Digg is a great experiment in web “democracy” — a site where ANYONE can submit links to content and vote on links to their favorite content. The positive outcome of the Digg experiment has been demonstrating the power of “networked human intelligence” to filter the vast sea of content on the web and allocate attention to content on a scale only rivaled by search. But Digg has also demonstrated that a completely open network will be subject to so much gaming and manipulating that it’s not possible to maintain that openness.

Think video is the future of online media? Broadband revolution, right? Apple perfecting the digital video experience? Well, not if everyone decides to embrace that future all at once. Time Warner Cable is experimenting with caps on broadband usage, which means too much movie downloading and suddenly you’re paying $30 per movie.

Fred Wilson wrote the other day about what observing his kids’ media habits tells him about the future of media — I’ve has a similar impulse to try to draw insights from observing real young people’s media habits. But is this the best way to predict the future of media?

If you dig beneath the surface of the brouhaha over Robert Scoble getting his Facebook account suspended for testing a new Plaxo Facebook app that mines user email addresses in violation of Facebook’s terms of service, you’ll find evidence of two increasingly apparent realities about the future of the web:

1. Data is POWER
2. A war will be fought over control of the data

Instead of the usual predictable predictions, I thought I would ring in the new year with five principles that I believe will guide the ongoing transformation of media companies.

Google has been quietly rolling out social features across all of its services based on Gmail contacts. While Google still has to overcome some of its social tone-deafness (e.g. automatically adding contacts without asking), this move makes perfect sense. For people over 30 (and probably even over 25) email IS the social graph.

I can’t count the number of times I’ve listened to print publishers debate whether to use a dedicated online sales staff or use what Borrell Associates calls “convergence sales,” in the report 2008 Local Online Outlook: Convergence Era Ends, Stand-Alone Sales Skyrocket. “Convergence” means, in the worst (all too common case), print sales reps tacking on online ads as an after thought, or — in one of the all-time great “shoot yourself in the foot” ad sales strategies — as “added value” (ad sales euphemism for “free”).

For most print publishers, mapping the audiences for their various titles would yield a cluster of overlapping circles — many readers of one of the publisher’s titles also read at least one other title. This is particularly true in trade publishing (magazines and books), where publishers often have multiple titles within a vertical, but it is also true of newspaper companies that publish many papers within a larger region. For these publishers, mapping readers’ interest in content across their vertical titles would yield a similar cluster of overlapping circles, as few readers are interested in ALL the content across ALL titles, but rather SOME content across SOME titles.

Let’s play a game. I’m thinking of a company that identifies talented people who can produce great content that attracts an audience. This company then pays these content producers to publish their content, with the aim of growing a large audience for that content and creating an editorial environment that will be attractive to advertisers.

The case for why publishers should be able to charge for content on the web always revolves around the exceptions that prove the rule, e.g. Consumer Report and WSJ — which, let’s be honest, are the same examples everyone was using back in 1998. The problem with paid content on the web isn’t that it’s not possible — it’s that it’s HARD to do, because it requires that the content not be a commodity — and content not being a commodity typically means it’s not available anywhere else for free. And the web has made free content ubiquitous.

It seems that everything that can command consumer attention — websites, software applications, social networking, video games, reality TV — is being monetized through advertising. So why not books? Especially in dynamic digital formats? Tim O’Reilly argues no:

As with Facebook Beacon’s implosion, the PR tailspin of Facebook itself is more interesting for what we can learn from it than why it is happening. What’s most interesting about Facebook’s downturn, as Josh Quittner observes, is that there’s not wrong with the technology:

Facebook Beacon, currently in the process of going down in flames, is a classic case of overreaching. So much has been written about what’s wrong with Beacon — blatant privacy violation, lack of blanket opt-out, failure to make it opt-in, gathering data from non-Facebook users — but I haven’t seen much about WHY they got it so wrong. (Except for Umair, of course, who called Facebook evil back when everyone was still slobbering over them.) The reason why Facebook got it so wrong with Beacon is actually much more interesting and important to the evolution of media, advertising, and technology than the reason why Beacon is imploding.

When Apple launched the iPhone exclusively on AT&T’s crumby edge network — and I refused to buy one for that reason — I predicted that Apple’s real endgame was to break the wireless carriers’ stranglehold on handsets, so that Apple could sell iPhones on any network. Sure enough, Verizon just announced that next year it would allow any phone — and any application on any phone — to be used on its network.

A couple months ago I wrote that the mobile web sucks, based on my own user experience that didn’t seem to match the hype. Some people agreed, but a lot of people defended, passionately, the mobile web. Today the New York Times published some interesting data: