Posted by Tom Foremski - September 20, 2013
[Updated from Kara Swisher with traffic numbers and compensation. Also: She reports that a deal is almost done.]
I'm a big fan of the AllThingsD editorial team because of its old school insistence on quality reporting and its ethics so I'm looking forward to the new venture as Kara Swisher, Walt Mossberg, and team strike out from News Corp./Dow Jones with a new media partner and investors in early 2014.
Here's my reading of the tea leaves from the official statements from Dow Jones and from AllThingsD:
- The name AllThingsD will likely be retired and not used by Dow Jones. Gerard Baker, Managing Editor of the Wall Street Journal (and a former Financial Times editor) wrote in his announcement of the end of the agreement with AllThingsD:
Wall Street Journal and All Things D Decide Not To Renew Agreement At The End Of the Year
We plan to embark on a major global expansion of our technology coverage, which will include adding 20 reviewers, bloggers, visual journalists, editors, and reporters covering digital. As part of this global push, we will also be expanding our conference franchise to include an international technology conference and building a new digital home for our first-class technology news and product reviews on The Wall Street Journal Digital Network.
This new initiative will be an integral part of The Wall Street Journal and will be rooted in the Journal's reputation for excellent, fair, objective, reliable and stimulating journalism.
It makes no sense to use the AllThingsD brand for this Wall Street Journal initiative since the people associated with it will no longer be there. Plus, the AllThingsD brand sat awkwardly within the Wall Street Journal brand, because it had a much different style and presence. AllThingD competed for resources with the Wall Street Journal and that meant it didn't have the means to expand — a key reason for the separation.
It makes no sense for Dow Jones/Wall Street Journal to keep the name or to sell it since it would be a competitor to its own technology news expansion, and conference business.
- Walt Mossberg was a Wall Street Journal employee unlike the rest of AllThingsD staff who are employed under a contract with a third-party company set up to administer the payroll and related HR matters. From Mr Baker's press release, he thanks Mr Mossberg.
As part of the mutual separation, Walt Mossberg will be leaving the Journal at the end of this year. I want to offer heartfelt thanks for more than twenty years of Personal Technology columns as well as his very fine reporting on national and international affairs in the years before he turned his attention to technology coverage.
This would indicate that either Mr. Mossberg tied his future involvement to the renewal of the AllThingsD contract; or that he is retiring at age 66, from the payroll of Dow J0ones but with plans to continue his involvement with the future NotThingsD.
- One of the chief challenges facing NotThingsD is to find a salesforce that can sell its conferences, and the organization to administer them. These are not trivial tasks and the Dow Jones salesforce was able to sell more than $12 million in sponsorships and in conference fees.
- Advertising revenues. Kevin Delaney, a former managing editor of WSJ.com, now working at The Atlantic's Quartz, reported: "The site itself has about eight million monthly unique visitors, according to internal company figures."
Kara Swisher told SVW that the Dow Jones media kit numbers are wrong and that Kevin Delaney's numbers are more accurate, and that Google analytics lists more than 10 million unique visitors a month — a number that continues to grow.
Those are impressive audience figures but revenues from advertising continue to decline and it means publishers need to continually chase higher traffic. This is best done as part of a cross-promotional strategy using a network of affiliated news sites. Which is why NotThingsD will require a substantial media partner to keep ad revenue growing.
The aim will be to leverage its large audience into a series of conferences where the main bulk of revenues will be generated.
- The salaries of founders. Edmund Lee reporting for Bloomberg:
Mossberg and Swisher together take slightly more than 50 percent of AllThingsD’s conference revenue, including ticket sales and sponsorships, according to people familiar with the business, who asked not to be identified because the terms are confidential.
Walt Mossberg's salary was being covered by the Wall Street Journal and was likely more than $500K. Kara Swisher told SVW that her salary was relatively modest and that most of her compensation was from a profit sharing deal.
New investors would be unlikely to accept very high salaries in a startup but a media/conference partner would likely agree to performance-based compensation.
- It would be great if Kara and team can take some money off the table when raising their funding as a reward for all their hard work in building a top news site. New investors might baulk at such an arrangement and it could be several more years before the founding team can cash out some of their ownership.
In the meantime, the team face several years of hard work in a tough media market where media companies such as Google, Facebook, and LinkedIn can offer advertisers better deals while bearing very low costs of content creation — NotThingsD has to pay San Francisco salaries.
The media boulder…
Most news sites receive 60% or more of their traffic via Google. Starting fresh with a new site and a new brand means that they lose their entire archive and many years of links from reputable sites — all of which gave the site a great standing in Google's index.
Few sites link to others these days and so recreating that archive of importance will not be as easy as it once was. However, Google now counts many other signals of importance, especially in social media, where Kara Swisher is the most active out of the entire team. Her large Twitter following of 906,000 will come in handy.
It looks like the NotThingsD conference business will have to continue to be the cash cow. And plans to produce more video content could be another good source of revenues provided they have the partners to give their work the visibility it deserves.
I've no doubt that the irrepressible and energetic Kara Swisher will create a successful news venture but the founding team must be feeling like Sisyphus — rolling an immense boulder up the mountain one more time.
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