Opportunity ‘08: the RSS Reader Market

In 2007, RSS took a huge step forward as it edged a little closer to becoming a mainstream tool. (Check out ReadWriteWeb’s in-depth overview of the year in RSS).

While Google Reader made a big splash and Bloglines remains a key player, the RSS reader market is still ripe with opportunity and, not surprisingly, there is no lack of start-ups looking to establish a foothold as more people look for easy and efficient ways to use RSS to consume content.

Given RSS still has a long way to go, competition is healthy and necessary so it’s encouraging to see so a growing number of companies battling it out using a variety of approaches.

This ranges from Waterloo, Ont.-based aideRSS.com, which crunches data from sites such as Technorati and del.icio.us to measure the “social engagement” of each post within your RSS collection. This produces a ranking system that makes it easier to select which posts to read.

Another interesting start-up is fav.or.it, which lets you read RSS feeds as well as write blog posts and comment on other people’s posts within the fav.or.it platform. For more, check out Robert Scoble’s interview with fav.or.it’s Nick Halstead. (Note: fav.or.it is still in beta so I haven’t been able to try it yet).

There’s still opportunity in the RSS reader market for a few reasons: One, the market is far from saturated as many people have yet to embrace RSS, let alone use a reader. Two, no one has emerged with a killer service, although Google Reader has made some great strides in recent months. There’s still room for a service with a few bells and whistles beyond just being able to add and read RSS feeds, which is why aideRSS and fav.or.it are so intriguing.

While the consumer market attracts a lot of the RSS reader spotlight, it’s still unclear how these companies are going to make money from offering their services. The most common business model is – surprise, surprise – “premium services”.

A far more promising business opportunity appears to be the corporate market. This explains why NewsGator was able to raise $12-million in venture capital recently. Over the past two years, NewsGator has migrated nearly its entire business to the corporate market, and it now counts 12 Fortune 100 companies as customers.

There’s no doubt RSS will continue to become more popular in 2008 to deliver and consume content. The question is who will emerge as the leading consumptions tools and how they will make money.

More: For part I of my Opportunity ‘08 series, check out this post on the vertical blog search market.

Technorati Tags: Google Reader, NewsGator, RSS