By: Amanda Kelsten
Gil Elbaz, the man whose first startup company inspired Google’s Adsense, is getting new attention for his next company, Factual Inc Factual, Inc. is “organizing bits of useful data strewn across the Internet” into more intelligible “databases” that can be sold to companies for their own websites and business operations (MacMillan). Factual, Inc. aims to transform this seemingly chaotic and useless data on the Internet, including names, numbers, dates, and locations into meaningful information that other businesses can utilize. For example, the company is currently building databases regarding “health, entertainment, and other topics” including “basic information about businesses and geographic points of interest” (MacMillan). These basic applications are currently being used by some powerful brand names, such as Facebook, which has recently launched Facebook Places. Facebook Places allows people to update their location to Facebook friends through their mobile phones. Another example of a practical application of Factual’s work is Navigating Cancer, a website that allows cancer patients to access names of “oncologists, including details on what type of insurance they accept and areas of specialty” (MacMillan). As a result, Factual is working hard behind the scenes of many popular brands as well as lesser-known firms to make information more accessible for other companies as well as consumers.
While Factual has yet to make a profit, the firm is representative of a recent trend in data-as-a-service, which involves companies that compile open database. This makes a “fairly difficult-and expensive- set of data much easier to access” (“Factual Ties…”). This connects to the concept of cloud computing, witnessed with business ventures like Amazon’s Web Services. These services allow businesses of all sizes to attain extra storage space or organized databases at a fraction of the cost of manually gathering and storing the data themselves (“Factual Ties”). There are numerous positive benefits associated with this type of business model, as well as the IT applications available for other businesses and consumers. For example, Factual, Inc. can hopefully grow to gain a profit like Amazon’s Web Services, which will reinforce the prevalence of data-as-a-service in the business world today. Furthermore, the businesses that use Factual’s databases will be better able to manage their company data and create better products through their technological innovations. For example, Booyah uses Factual’s database for its mobile game, which allows virtual players to visit “real-world bars, restaurants, and other hot spots” in the game itself (MacMillan). It is also much cheaper for businesses (especially smaller startups like Booyah) to use pre-organized databases as opposed to gathering the information manually, which would require a lot more manpower and resources than these smaller companies have at their disposal. Finally, Factual’s databases benefit the consumers who use applications like Facebook, for we gain access to more applications like Facebook Places. Receiving this information is made possible through technological advancements that companies can make as a result of their improved and more organized data.
Nonetheless, as with most startup companies and business ventures, there are risks involved. For example, as of now, Factual, Inc. is not making a profit, considering they are only making “50 cents for every thousand data requests…totaling $500” per customer on average (MacMillan). Thus, data-as-a-service needs to become more lucrative so that companies that enter this up-and-coming field can actually survive long enough to sell their services to other companies. Also, since this new industry is up-and-coming, there are a lot of competitors that offer very similar services. This past summer, Google bought Metaweb, a company that uses more employees to perform similar services to that of Factual, Inc. (MacMillan). As a result, there is potential for companies like Factual to gain large profits, as Google has seen with its Adsense application. However, without powerful clients like Google to give large profits to new firms like Factual, the future for the data-as-a-service sector is still very much unknown. It appears the more data amassed and collected, the more competitive edge in the market, leading to higher revenues and profits in the future.
Here is a Youtube for Metaweb, the data-as-a-service company recently purchased by Google, and how it works to help make word searches more accurate based on various meanings and contexts.
Sources:
"Factual Ties With Partners On Local Data Effort." SocalTECH.com. 05 Nov. 2010. Web. 09 Nov. 2010.
MacMillan, Douglas. "Factual Wants to Put the Web in Order." BusinessWeek. 04 Nov. 2010. Web. 08 Nov. 2010.
1 comment:
Factual Inc. sounds like it is doing some very interesting and useful work, and something that nobody else has really put into action before. The fact that they are not making a profit right now is maybe a bit worrisome because you wonder how long it will take them, but as they become more popular they should be able to charge more and have more customers, thus make more money. Unless they can make more no other companies are going to want to join the industry, and this is too good of an idea for it to die off like that.
But I think it will do just fine in the future. The idea of a company taking a lot of useless information that can already be found on the Internet., and organizing it is a very interesting and useful business venture. In terms of marketing it is definitely something companies can use to learn more about their consumers and know what they need to do to make their product better and to be more profitable. Using the data and knowing the consumer better cannot possibly do anything bad to the company, which makes this a very useful, and not all that expensive, investment for companies to make.
Some of the data topics they use include health, electronics, local, education, government, and more. These categories alone can cover a broad range of companies and can help to sort a lot of data and make a lot of companies more productive. Newsweek has used this new system to rank the top high schools in the country . Things like this can help people choose something as simple as a high school, or as serious as a doctor for treatment. This is where it is very important for consumers to have the ability to use data that is out there to help them with day-to-day problems.
Allowing all of these companies, whether large or small, to attain extra storage space is a great idea as well, and it incorporates the idea of cloud computing. Putting the power of working on the cloud with the new data that the businesses will be able to use, will help to make it cheaper for companies which could make it more attractive for them. And I think that is the most important thing for Factual Inc to do. They need to get there product out there and show people what it does and show them the benefits and how cheap it really is. Once a few companies see the product and start to use it they will gain an advantage, and then other companies will be forced to join in to keep up with the rest of the industry.
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