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Eight Predictions for 2008

If you want to read my predictions for 2005, 2006, and 2007, click on the hyperlinks in this intro sentence. I’ll spare you the pain of recapping what I predicted in 2007 – feel free to make comments on that post if you have something to say.

I have a handful of predictions (8 actually) for 2008. It’s no fun if you get everything right, so I’ve tried to throw in a few that I would describe as very speculative.

1. Apple iPhone and the Blackberry are the only two major-league smartphone platforms that matter in the United States – There are stormclouds on the horizon, but I think the two most closed smartphone platforms outside of Windows Mobile will continue to be the big winners for 2008. By and large, this will be driven by the fact that these folks can control the end-to-end consumer experience. The iPhone will continue to dominate the consumer space and the Blackberry will continue to dominate the enterprise space.

2. Blu-ray will pull ahead of HD-DVD for the 2008 holiday season – Standards battles take a really long time to sort out. For some reason I have a hunch that Blu-Ray will establish itself as the likely winner (I’m saying the market will tip in favor of Blu-Ray, not that the debate will be fully settled) in the next-generation standards war. It will be a combination of titles made available, cheap hardware, and a pickup in PS3 sales.

3. Video advertising nut gets cracked – The stakes in video advertising are too high for someone to not figure it out. I don’t know whether it will be YouTube or one of the independent video advertising networks that figures out a really scalable, user-friendly advertising model that monetizes well, but someone will crack the nut in 2008. This does not mean that it will instantly become a massive near-term opportunity, but the path toward billions in advertising revenue will become clear. We’ll also see more standardization around ad formats and the types of ad units that really work well.

4. Casual games will be the social networking of 2008 – Social networking was a dominant theme in the press for 2007. Casual games are going to make a major splash in the press and in the collective tech consciousness in 2008. With game production costs going down and monetization opportunities going up, it’s a great combination for the re-emergence of casual gaming as a mainstream theme. It’s already starting to happen if you haven’t noticed already.

5. MySpace will claw back mental mindshare from Facebook – I actually feel really strongly about this one. If 2007 was the year of Facebook, I think 2008 will be the year that people “rediscover” that MySpace is really large and relevant to a really wide swath of the population. I don’t think MySpace is dead and I think they’ll come up with a few things in 2008 that remind people just how broad their reach is. It could be better monetization, it could be new features – your guess is as good as mine.

6. “Passively” social applications come into prominence – I wrote a previous post about how Google Reader is a great example of a passively social application. “Passively” social applications are ones that make use of social behavior without explicit user action. Think of something like Digg or as an “actively” social application – it requires active user input to work. Applications such as Xobni, Google Reader, and others will do lots of cool things to expose social trends, usage behavior, relationships, and linkages without active user input. And people will find the stuff that gets surfaced to be extremely useful and interesting.

7. SaaS gets lots of momentum as an investment theme – Posting this one is borderline cheating. I know that there are some really smart investors already spending time on software-as-a-service deals and I think 2008 will see a lot more announcements here. We have enough public SaaS companies to show that a) there is a path to exit and b) that the overall model works with a wide spectrum of customers. Plus, I think folks are going to be hungry to look at deals where the revenue story is a little bit easier to understand; that’s not the case with most consumer Internet companies.

8. One “major” web 2.0 company will “fail” – There will be one company that’s a web 2.0 poster child that will fail. And by fail I mean fail to raise another round of venture capital or get acquired for an acceptable price given its prominence. To matter, the company has to have “millions” of users (registered, monthly uniques, etc) and be a real poster child for the category.

It doesn’t count as a prediction, but I’m really curious to see what 2008 has in store for Yelp, Digg, and LinkedIn.

The macroeconomy is a big question mark, so I didn’t know how to factor it into my own predictions. If the economy goes into the tank, all bets are off.