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Hitwise Intelligence - Sandra Hanchard - Asia Pacific

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Internet Singularity - Matching Online and Offline for Innovation

October 18, 2006

I've had the concept of Internet Singularity fermenting at the back of my head for quite some time now and have been meaning to post on it. Internet Singularity, coined by Dr Gary Flake at Microsoft Live Labs, is loosely defined as the "idea that a deeper and tighter coupling between the online and offline worlds will accelerate science, business, society, and self-actualization".

One of the central themes of our weblog has been how online search behaviour is a proxy for the mindset and preferences of consumers in the offline world, and it would seem with Hitwise reporting on the online behaviour of 25 million Internet users, on a daily basis, our data provides an excellent source for interpreting 'internet singularity'.

While we've explored the theme of the Internet mirroring offline behaviour, how does our data reflect the promotion of innovation ("will accelerate science, business, society, and self-actualization") that comes through the coupling of the online and offline worlds?

I'll use the innovation of the ipod as a simple demonstration of this concept, as we've monitored searches for ipods for some time. The thesis is that online user reviews of the ipod are correlated with the development of the product and demand for accessories, with the subsequent effect of increased offline sales for Apple. Here are three charts that offer a proof of this (note I've used US online data as public ipod sales figures are available in USD):

1.Online User Reviews of the ipod

The below chart shows that the 'ipod' as a topic of discussion in Net Communities has increased steadily overtime:

2. Product Diversity and Accessory Searches

The below figure shows an increase in the number of variations on the search term, 'ipod' which reflects the diversity of searches. Innovations over time include 'ipod shuffle', 'ipod mini', 'ipod nano', and 'ipod video'. Ancillary product variations include, 'ipod speakers', 'ipod nano cases' and 'ipod nano accessories'.

3. Sales figures for the ipod

Finally, sales figures that indicate the phenomenal success of the ipod (source):

In conclusion, over time, user discussion of ipods online has increased; there have been several product innovations; with revenues enjoyed by Apple. To acknowledge the limitation of this example, a mechanism between online user reviews directly into production offline hasn't been demonstrated, but it does show that the online world does mirror the offline world, with the advancement of business and innovation. Critiques? Feel free to comment.

Posted by Sandra Hanchard at 10:34 AM | (1) | (0)
In Categories Internet Singularity

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