Cashing in on RSS

Cashing in on RSS
VC Jim Moore is betting that this new technology will usher in a new era of software applications for the web.
Aug 12 2005
By David Kirkpatrick
Fortune.com

You know that blogs are cool, but do you know that blogs, and a related technology called RSS, may hold the future for software? That’s the view of Jim Moore, a longtime friend of mine, whom I talked to earlier this week. Moore and his three business partners caused quite a stir last month, when they announced that they have raised $100 million for the first-ever venture capital fund devoted to these technologies, called RSS Investors.

Moore, author of an important book on business strategy, The Death of Competition (HarperBusiness, 1996), says that blogs and RSS are ushering in "the democratization of web services."

After spending years as a consultant to CEOs of some of the biggest technology companies, like Intel, Hewlett-Packard, and Qualcomm, Moore took time off a few years ago to be a fellow at Harvard’s Berkman Center for the Internet & Society. At the center, he encountered Dave Winer, a legendary programmer who played a big role in developing blogs, RSS, and even the latest rage, podcasting. "Having Dave as my office mate for a year is what led me to realize there was a big business opportunity here," says Moore.

RSS stands for Really Simple Syndication, but it’s easier to use than to explain. RSS is just a way to have information regularly sent to you from a website, in what’s called a "feed." Users receive these feeds in special RSS reader software, much as you receive email in your Microsoft Outlook. These feeds can come from any source, large or small. I receive a feed of headlines from The New York Times on my My Yahoo! home page, but I also subscribe to one from Fred Wilson, a New York investor who maintains a blog called A VC. More sophisticated RSS readers can be found on sites such as Bloglines and NewsGator, and on web browsers such as Apple’s Safari. Other companies that have piggybacked on these technologies include Technorati, Feedburner, Feedster, and NewsGator.

Bigger Internet players are now snapping up firms that use these technologies. Flickr, recently bought by Yahoo, lets users share photos, post them to blogs, and send them from their camera-phones. And Bloglines was bought by Ask Jeeves, which is itself now being acquired by Interactive Corp.

New RSS-centric companies are emerging all the time. Rojo is building a new sort of feed subscription site, and Flock is creating what it calls a "social browser." One firm that Moore particularly admires is del.icio.us, which allows you to save websites you like, create labels for them, and share them with your friends. del.icio.us, makes highly creative use of RSS feeds. You can, for example, subscribe to a feed that will only send you links to online videos that at least ten people have labeled "funny."

Moore says RSS and other technologies are poised to vastly expand online automated software programs, or what are called "web services." He thinks that more ways to acquire, share, and benefit from information will emerge. "There are a whole set of things which, taken together, are a new paradigm for software development," says Moore. "The revolution is that a set of elements now allow people, including end users, to very simply knit together powerful "web services."

Until recently, professional software developers have mostly created web services using one of two complex sets of code. Microsoft has .Net (pronounced "dot-net") and Sun, IBM, and others use the competing J2EE. But Moore thinks we are heading to a world of web services built around RSS and other simple web technologies. This will let just about anybody build on to someone else’s software application on the web. "The elements of this programming are very simple instructions, like URLs, RSS, and zip codes," he says.

One example of how technology already lets people build onto other software applications is Google Maps, which allows you to subscribe to a map from its database and then put your own information on top of it. That’s just the kind of service, or simple application, that Moore finds exciting.

Moore believes that even companies like enterprise software giant SAP could find themselves threatened, as pieces of their business become available as much simpler services on the web. He speculates, for example, that companies will begin to figure out how to perform tasks, such as tracking inventory, using RSS feeds.

Jim Moore has always been one of my most visionary friends. I’m not sure this world he describes will emerge. But there’s no question that RSS is one of the most powerful technologies of the Internet age.