Silicon Valley Watcher - reporting on the intersection of technology and media

The New York Times Company reported a profit of $39.1m for its second quarter, beating Wall Street estimates forecasting a loss.

Three months ago it reported a loss of $74.5m for its first quarter.

The net income was 27 cents a share, compared with 15 cents a year earlier. Excluding special items like one-time charges and the tax adjustment, net income in the most recent quarter was 8 cents a share; analysts had forecast, on a comparable basis, a 4-cent loss.

However, this does not signal a turnaround in the newspaper sector. Profitability was achieved by severe cost cutting measures and a favorable tax adjustment.

The company trimmed operating costs 20 percent from a year earlier, or by $140.5 million; $29 million of that reduction came from the closure early this year of City and Suburban, a money-losing newspaper and magazine distribution subsidiary.

“For the full year we expect to save $450 million,” (Janet) Robinson (CEO) said. “That amounts to 16 percent of our 2008 cost base.”

Ad revenue plunged by nearly 32 per cent, the steepest decline since the Depression. Revenue from online operations dropped 14.3 per cent to $78.2 million.

Foremski's Take:

Clearly, the New York Times Company cannot continue to cut costs in order to make money. It's not a sustainable business strategy. And with online revenues falling it will be forced to come up with a way of charging its online readers.

Ms Robinson told analysts that the company is "undertaking quantitative and qualitative research as to how many of our readers would be willing to pay for online content, and how much they would pay. At this time, our work is centered on a metered model and a Times membership model with special offerings."

This is not a new strategy. The New York Times had to abandon an earlier attempt to charge for content.

Adknowledge, the largest online advertising network, today acquired Super Rewards, a fast growing startup that uses virtual cash to engage people with advertisers. The value of the deal was not disclosed.

"I'm very excited about the promise of virtual cash," Brett Brewer, president of Adknowledge, told SVW. " We wanted to acquire the leader in this space because we think that growth is going to be very fast. And we can scale the Super Rewards technology across our entire business. We also have offices in many countries and can bring in country specific advertisers."

Mr Brewer said that Adknowledge annual revenues are about $250 million. But display advertising is becoming less effective. "We think virtual cash is going to be very big. Instead of bombarding consumers with more ads, Super Rewards allows people to engage with advertisers, it gives people a choice."

Virtual cash is a big business in the online gaming world and it is now also being used in social networking sites.

Super Rewards pays people in virtual currencies of their choice in return for specific tasks such as if they sign up for a Netflix account or apply for an insurance quote.

Super Rewards buys the virtual currencies and in turn is paid by companies as part of regular affiliate sales commision. It makes its money on the difference between the money it earns from the affiliate sales and the cost of the virtual cash.

Affiliate marketing was initially popularized by Amazon, which pays a percentage of sales to "associates" who bring in customers. Super Rewards has affiliate sales relationships with about 4,000 companies.

Mr Brewer sees applications for virtual cash beyond gaming and social network sites. Virtual cash could be used by newspapers. "I've spoken with some newspaper groups and they are very open to exploring this market."

Mr Brewer says Adknowledge has relationships with large advertisers such as Dell, and Expedia. And that they are interested in virtual currencies.

Mr Brewer is the co-founder of Intermix Media, which created MySpace.

[Please see: There's Real Gold In Virtual Cash - Is This A Solution For Newspapers? - SiliconValleyWatcher]

Foremski's Take:

It's interesting to see the online advertising industry seeking new ways of making money. It's an admission that traditional online advertising is becoming less and less effective.

Virtual cash is one of the potential solutions and the use of virtual cash can be extended to many new markets.

Earlier this year I interviewed Jason Bailey the CEO of Super Rewards. I pointed out that virtual cash could be used by newspapers as a surrogate micro-payments system for online content. For example, local advertisers could pay readers with virtual cash in exchange for viewing ads or filling out a survey. A local furniture store might offer virtual cash to readers of the "Home" section of a newspaper.

And newspapers could use virtual cash to pay for reader generated content. Newspapers could create a real economy around trading news services and content. This is a much more engaging business model than selling an ad - a marketing message sitting inside a box - easy to ignore and increasingly ineffective.

In terms of wider advertising opportunities, the Super Rewards technology could be used by larger brands. However, it is not clear if there is a broad demographic appeal for virtual currencies.

There is also a mismatch in the motivation of people wanting to acquire virtual cash versus wanting a Netflix subscription or an insurance quote. The quality of the leads is likely to be poor and cancellation of services is probably going to be at a higher than normal level.

However, this is a rapidly growing sector and we are in the early stages of the build out of virtual economies in different market sectors.

Adknowledge has made a savvy acquisition and pulled ahead of other ad networks in pioneering a new business model. It is well positioned to discover how this virtual currency market will develop and what are the most effective advertising strategies. And its large size will help to accelerate the educational process needed within the slow-to-change advertising business.

At the recent SDForum 2009 Visionary Awards, Vinod Khosla, one of Silicon Valley's top VCs, gave an inspiring and very humble speech.

How To Succeed In Silicon Valley By Bumbling And Failing...

Afterwards, I went over to congratulate him on his award and also say how much I enjoyed his speech. Rebecca Buckman, one of Forbe's top journalists, was also there. He then started to tell us a very interesting story, about how Silicon Valley VCs could have saved the newspaper industry--back in 1996.

Robert Scoble has been a tireless evangelist for the real-time web and he has been spending much of his time on Twitter and Friendfeed, and less and less time on his blog Scobleizer. [Please see:  Is Twitter (and Friendfeed) Killing Blogging? Scobleizer Hasn't Posted In 12 Days!!!]

Now he has sworn off FriendFeed and Twitter, saying that those services are "hurting long-time knowledge." This about turn comes on the heels of Mr Scoble berating Kara Swisher at All Things D for not taking part in the real-time web.

It’s interesting that neither Kara nor Walt show up very often on friendfeed, which is the best example of the 2010 Web right now. Kara Swisher has made a total of five comments there. Walt is even worse, doesn’t bring any items in there, and only has six comments. How can you know what the 2010 Web is, if you don’t use it and don’t participate in it?

However, by largely avoiding the real-time web Ms Swisher and Mr Mossberg have chosen to protect their largest asset -- their web site traffic.

By neglecting, Scobleizer, a web site run by Mr Scoble's employer, Rackspace, traffic to the site has plunged.

In just two months, from March to May 2009, Compete.com reports that traffic to Scobleizer fell from 181,500 unique visitors to 91,792. That's a nearly 50% drop in unique visitors!!! If the traffic for June can be projected, it looks headed for a 75% plunge.

I can imagine that Rackspace isn't too pleased to have such a massive drop in audience for its advertising and outages reports.

I'm sure that Robert can bring back the traffic but it's clear that its going to be difficult for him to also be active in all the other places, Building 43, Google Reader, email, Twitter, FriendFeed, FaceBook. And there's a lesson here for others too. You can't do it all.

I've been writing on this topic of "every company is now a media company" ever since I visited Dan Scheinman, head of M&A at Cisco Systems in March, 2005.

He told me that the @Cisco news site is run by journalists, and gets more traffic than the top computer trade newspapers. At the time Cisco was publishing more than 200 RSS streams. The penny quickly dropped and it was another of many "aha!" moments I have had since leaving the Financial Times five years ago.

These days more people understand the term and what it means to companies. However, not everyone understands what it takes to be a media company. If you are going to do it well It's a hell of a commitment.

I was at an event this evening and I met a journalist who was new to the profession. She had been in IT and now was working for a San Francisco newspaper. She asked if I had any words of advice for a new journalist.

I said welcome. But be careful it doesn't get under your skin because if it does, it will become a problem. It'll be very difficult to leave.

In many ways,  being bitten by journalism is similar to being smitten. It's similar to falling for the wrong person.

I'm a big fan of Gabe Rivera's Techmeme. Over the past year or so, Techmeme has managed to improve its results by using humans, in addition to its much vaunted algorithm -based approach.

Lately, Techmeme seems to be relying even more on humans by paying attention to Twitter and to Twitter's prolific news tipsters. The most successful of these is Atul Arora.

As the Twitterati, (and FriendFeederati,) abandon blogging and past-tense sites, is this a sign of the next phase of online media? It seems that way.

So what will happen to online advertising, and the "old" media? There's no real-time ad networks right now and none on the real-time media that I see.

The old media (we used to call it mainstream) has barely gotten used to the "Always-On-Media" of blogging, etc. Now they have to jump into the real-time web.

And they can't.

Because there isn't a business model in the real-time web. (Just as there isn't in online media.)

By the time they jump in, there might be a business model then. Maybe. But I bet it won't be enough to support professional work.

I was going through a list of venture capital blogs the other day and I found many were dead, hadn't been updated in months. . . some in years. But I also noticed that some of the owners of the dead blogs were still alive and active -- they were on Twitter.

Then I happened to look at Robert Scoble's blog, "Scobleizer." When I started SVW five years ago, Robert was the top tech blogger and very prolific, posting many times a day. But I was shocked at what I saw the other day. The most recent entry was on his blog at the time of writing was May 29, 2009. UPDATED: He didn't post again for 12 days!

And his prior post was on May 24.

I know Robert is very active on Twitter and on Friendfeed, and you can find him there.

But I wonder what his employer, Rackspace, thinks about all of this. Presumably they hired Robert because of his visibility online. But his visibility in the "real-time" web is much less than his visibility on his blog, which is read by far more people.

Robert's tag line on Scobleizer is "Exploring the 2010 Web." I'm sure he is, just not that much on Scobleizer.

A study of Twitter users conducted by Bill Heil and Mikolaj Jan Piskorski from the Harvard Business School has uncovered a surprisingly large gender gap compared with other social networks.

The study sampled 300,542 users. It found that men were twice as likely as women to follow other men, and women were 25 per cent more likely to follow a man than a woman. This is despite there being slightly more women on Twitter.

This is a big difference compared with other social networks.

On a typical online social network, most of the activity is focused around women - men follow content produced by women they do and do not know, and women follow content produced by women they know. Generally, men receive comparatively little attention from other men or from women.

The authors of the study could not explain the different gender ratios.

Another way Twitter differs from other online social networks is in how rarely a user tweets. Just over 50 per cent tweet just once in 74 days. But 10% of users create more than 90% of all tweets.

On a typical online social network, the top 10% of users account for 30% of all production.

...This implies that Twitter's resembles more of a one-way, one-to-many publishing service more than a two-way, peer-to-peer communication network.

Foremski's Take:

I was driving through San Francisco on my way to SF New Tech and had to stop and take this shot. This can't be a good sign for Twitter.

(Evan, Biz. Sell now! (Or take some money off the table . . . Give Mark Z a call, there's always an opportunity to do some laundry. . .))

Here is more proof that Twitter days are numbered.

From: All Things D:

Twitter Guys: We’ll Still Be Running This Company in 5 Years

Meet the Internet’s It Boys: Twitter co-founders Evan Williams and Biz Stone. A year ago their “micromessaging” platform was unknown outside of a small circle of digerati. Now the service has broken through to the mainstream, or at least to the mainstream media (thanks, Oprah!). But while Twitter has no problem generating attention, it’s still unclear how the company will actually generate revenue.

(BTW, don't you just love news stories that tell you something new?)

And of course:

Twitter in TV deal

WASHINGTON (AFP) — Micro-blogging sensation Twitter is heading for another screen -- the TV screen.

Twitter co-founder Biz Stone said in a post on the blog of the hot San Francisco-based startup that Twitter had entered into a "lightweight, non-exclusive, agreement" with TV producers Reveille and Brillstein.

Stone did not reveal any details about the project except to say it would not be for an "official Twitter TV show."

(More here.)

I would be programming my Tivo ((if I hadn't gotten rid of it and cable TV...) but I'm certain it'll be on Hulu or Rev3.)

Even more proof:

Kutcher threatens to stop Twittering

LOS ANGELES, California (CNN) -- Ashton Kutcher -- Twitter's top tweeter -- warned he may pull the plug on his tweeting if the micro-blogging service partners on a reality TV show.

More here.

Yes, I did Twit this post but I figure Twitter has about 25 days left... give or take a month or two.

What will take Twitter's place?

I'll tell you about it later this week: the next hot club house that the cool kids will be hanging out at.

Russ Fradin says the online advertising industry is doing well and growing -- it's certainly not a shrinking medium even though some reports of falling ad rates might indicate problems.

Mr Fradin is CEO of Adify, a large advertising network that was acquired by Cox Enterprises about a year ago. Its a platform for building smaller ad networks focused on "vertical" content such as iVillage - which caters to women. Here are some notes from our conversation:

-- I mentioned Nick Denton of Gawker saying that the micropublishing dream is dead. Mr Fradin disagreed, saying that "it was never going to happen." The idea that bloggers running niche sites would be getting rich was a fantasy. He thinks that micropublishing will gradually become more profitable but no one is going to be selling their blogs and retiring.

-- Every online ad network continues to do well despite the economy because there are still a lot of ad budgets shifting online from radio, television and newspapers.

-- There wasn't much of interest at the recent AdTech conference in San Francisco except that advertising agencies are wondering what role they will play in the online world.

-- There is a tremendous amount of content online and more coming online all the time, this appears to dilute online advertising dollars. This fragmentation is increasing and that's what makes it difficult for media companies to make money because there is so much competition. Fragmentation is destroying media. Ad networks provide value because they aggregate content for advertisers.

-- Won't there be a shakeout on the content side I asked? No, there will always be people willing to create the content for little money because they have a day job.

-- Politico is a good example of a media company that is doing well. It is syndicating its content along with its own advertising network and sharing the revenues with newspapers. Newspapers are able to shut their Washington bureaus and use Politico content instead.

-- Social networks won't find a magic formula to boost their CPM rates but they can still be very lucrative because they can serve up trillions of pages.

-- Adify is nearing signing up 200 vertical ad networks.

-- Federated Media seems to be turning into a social media ad agency.

-- Cox has been a great owner, very nice people. It lets Adify do its job. Adify is growing and hiring lots of engineer in UI and back-end operations.

Advertising Age has an interesting interview with Nick Denton, a former Financial Times journalist and head of Gawker Media, which publishes several high traffic web sites such as Gizmodo.

This extract was striking:

Ad Age: One cherished notion of downturns is that it's the best time to launch a media property. Any plans along those lines?
Mr. Denton: I have one scheme in mind -- but I'm ever conscious of the need for scale. Remember the dream of micropublishing? A few years ago, we still believed that costs were so low and online advertising so magical that the most arcane of subject matters could attract a viable audience. That dream is dead. We'll spend our time and money on sites such as Gizmodo, Kotaku and Gawker -- where we already have the scale or soon will.

This is interesting because Mr Denton is a poster child entrepreneur for "blogger" new media. Gawker was born from that early promise of micropublishing yet Mr Denton now has to hoe the old media line: provide large numbers, hopefully to reach a scale that reminds the advertising agencies of the old media -- as if nothing had changed in their world.

Since the mid-1990s we've been talking about how the Internet would allow hyper-targeting of audiences with content and with marketing messages. Why buy a scatter-shot advertising campaign with a potential reach of 20 million people when you can target just the 10,000 people you really want?

Advertising agencies still want to just buy "numbers" rather than the right numbers. They would still rather buy a "Super Bowl" type ad than than try to drill down to reach the right people.

When I met with Russ Fradin from Adify, the Cox-owned advertising network, last year, he said it was because advertising agencies don't want to deal with hundreds of separate invoices for placing targeted ads on sites.

So, is the micropublishing dream dead? Or has it not yet arrived? That's my view. The micropublishing opportunities are still ahead of us because the ad agencies haven't shifted from their old ways of doing business. But we know they will shift.

They will shift because there are excellent arbitrage opportunities. The ad agencies that can manage the complexities of targeted online media buys will do much better than the good old boys.

There are lucrative business opportunities for those ad agencies that can do this well -- especially within a performance based model such as in affiliate marketing.

When that happens, micropublishing will flourish because it will have the support of targeted marketing dollars. This will enable publishers of micro-sites to continue to produce top-notch content that attracts a specific audience. It might even restore that virtuous interaction between content and advertising -- a familiar media business model.

- - -

Please see:

The Fallacy of Internet Ad Personlization...and the Bleak Future for Social Network Ads

Gawker's Nick Denton: 'Original Reporting Will Be Rewarded' - Advertising Age - Digital

Silicon Alley Insider yesterday reported that New York Times and Google are in talks about introducing a new type of advertising that is embedded in a news story and travels with it when it is quoted on other web sites.

Nicholas Carlson reported that Arthur Sulzberger, chairman of the New York Times Company, had visited Google's headquarters, and a source close to the talks said "one or two models" were discussed:

- A potential agreement in which any time Google's search crawlers find a Web site carrying New York Times content and Google ads, Google would split the revenue it gets from those ads with the Times.

- Google would somehow help the New York Times actually embed ads within its text so that when blogs or other Web sites use that text, the ads go with it.

A New York Times spokesperson told Mr Carlson that the two companies had been collaborating "for quite some time."

This is the same "Adtribution" advertising model proposed by Silicon Valley Watcher nearly a year ago:

June 20, 2008: A Proposal and a Response to AP - Quote Me Freely and Carry my Adtribution Link . . .

June 22, 2008 Support the Source: Creating a New Media Business Model and Keeping the Web Open

The Adtribution model is simple: if you publish a section from a news story you would also agree to publish the ads that are associated with that content. By doing that you receive a license to republish that copy. This method takes advantage of the distribution power of bloggers and the Internet, while also rewarding the content creator because the advertising associated with that content is also distributed.

Google could produce a tool in which any section of a news story that is copied and pasted into a new web page would automatically also copy and paste the associated Adtribution advertising. The Google tool would carry Google's AdSense advertising. Other advertising networks could produce their own, similar Adtribution tools for their advertising. It could also be built into popular publishing platforms for bloggers such as Wordpress and Movable Type.

Foremski's Take:

If the Adtribution model is widely adopted, bloggers would be in the front lines of helping to save newspapers. It's an interesting twist in that bloggers have been blamed for stealing content and readers from the newspapers and contributing to their downfall.

However, there are several issues that would need to be addressed. How would the revenues from advertising be split between the New York Times, Google, and the website owner/blogger quoting the news story?

Also, how much money would this make for the New York Times? Google is very good at monetizing advertisements on its search pages with its AdWords advertising program. But its AdSense program, which places ads on newspaper sites and other content web sites, performs poorly.

SVW's analysis of the two businesses, AdWords and AdSense, shows that its profit margin on search ads (AdWords) is nearly 40 per cent; its profit margin on AdSense (content ads on other sites such as the New York Times) is less than 5 per cent.

In 2008, AdWords produced 19 times more profit than AdSense. How motivated is Google in implementing an Adtribution model? It can make 19 times more money in building out its search engine advertising.

[Please see analysis here: Google Is Really Bad At Monetizing Content Yet CEO Schmidt Lectures Newspapers]

Also, how much money would a Google based Adtribution model produce for the New York Times given the poor performance of Google's AdSense ads? Other ad networks, such as Federated Media, which produce higher revenues for publishers than AdSense, could adopt the Adtribution model and generate more money for publishers.

The New York Times has an agreement with Google that might prevent it from using other ad networks.

- - -

Please see:

Adtribution Might Be A Solution For Murdoch, A.P, Et Al, Versus The News Aggregators And Bloggers

Lifestream of Brian Solis - Tom Foremski proposes “adtribution” -...

2008 June : New Communications Review

/Message: Tom Foremski on Adtribution

About four years ago I began writing about the need for "media engineers" a skill set that is part journalist and part software engineer. Software skills should be part of a modern journalist's toolbox. (My first job was as a software engineer 29 years ago.)

Aug 17 2005 Journalists need to learn to speak some geek. . .

...journalists barely know how to type, or even how to spell...

Most journalists don't know a lick of HTML or even much about their software and hardware beyond the basics familiar to a 10-year-old.

That's going to have to change as the print/broadcast world, on which journalism was built, becomes a mostly online mediasphere.

Journalists are going to have to learn to speak some geek, because increasingly, they will not only be researching and writing, but also producing and editing and publishing online too.

Aug 19 2005 The coming era of the media engineer and media entrepreneur

This is now the era of the media engineer and media entrepreneur because the future is all about technology-enabled media companies.

[Oh, and BTW, every future company is a technology-enabled media company

It's been a long wait but I was very happy to see this article by Leena Rao over at TechCrunch: Calling All Coders: Journalism Schools Want You To Save The News Industry

Northwestern University's journalism school is offering free scholarships to software developers so they can further hone their journalism skills and possibly integrate the two for a media company down the line.

...The idea of creating programmers who understand journalism is compelling and brings attention to an important trend taking place in the industry.

Hyperlocal news site Everyblock and the St. Petersburg Times' truth finding political database Politifact were both built by developers with journalism backgrounds. Their model falls on the heels of Politifact, started by coder-turned-journalist Matt Waite, which won a Pulitzer Prize this year for national reporting.

It's taken many years for the journalism establishment to recognize the need for these skills. However, I think they have the cart before the horse.

Journalism takes time to learn. You don't need a journalism degree but you do need time to hone story telling skills. I would argue that it is easier to teach "geek" to journalists than the other way around.

I'd like to see more journalism schools offer classes in HTML, CSS, PHP, etc, to journalism students.

Software engineers don't need to know how to be journalists to be succesful. But journalists certainly do need to know some "media engineering" skills to succeed in today's world.

- - -

Please see:

Learning to speak Geek. . .

Ten Basic New Media Skills Journalists Need To Know

Eric Schmidt, Google's CEO, loves to tell the newspaper industry what it needs to do to be relevant in today's online world. A sample of recent headlines:

Eric Schmidt Tells Newspapers: Create Products People Want And ...

Google CEO Eric Schmidt to newspapers: Innovate your way out of it ...

Eric Schmidt wishes Google could save newspapers

Google CEO Eric Schmidt to Newspaper Association of America ...

Schmidt to Newspaper Execs: I'm From Google, and I'm Here to Help ...

Schmidt Lectures Newspapers - The Daily Beast

Yes, the newspaper industry needs to get wiser about how to adapt to the online world, but Mr Schmidt's lecturing is the pot calling the kettle black. Google is about as bad at monetizing content as the newspaper companies Mr Schmidt likes to lecture. And Google is getting worse at it! The evidence is hiding in plain view.

Jim Spanfeller, president and CEO of Forbes.com, accused Google of violating its "do no evil" policy and of failing to clean up a web "cesspool."

In an article titled What Google Can Do To Make The Web Less Of A 'Cesspool' | paidContent.org Mr Spanfeller wrote:

... in attempting to "do no evil," Google has done exactly that. I say this not just as someone running a content site but also as an end user. If this inequity of support continues along these lines, we will see a continuing destruction of our journalistic enterprises -- enterprises that are one of the core building blocks of our democracy.

Forbes.com estimated that Google makes $60m per year from directing traffic to Forbes.com. About $24m of that is from selling keywords with that include Forbes brand names. Google is making money from "simply being there."

I was at Chris Brogan's Inbound Marketing Summit on Wednesday, speaking on a panel moderated by Paul Gillin, on the subject of "Media in Transition: The Future of News in a Democratized World." My old friend Dean Takahashi from VentureBeat (formerly with Wall Street Journal, Red Herring, San Jose Mercury) was also on the panel, along with Ken Doctor, analyst with Outsell.

Media in transition is a fascinating subject, I can talk for days, for weeks on this subject.

Between the four of us on the panel, we probably have nearly a century of experience with news media. We now find ourselves taking part in an incredible transition within our industry of a like we will never see again in our lifetime.

And few people realize that Silicon Valley is the main instigator of the disruption happening in the media industry. It is Silicon Valley technologies and companies that are at the forefront of developing the new landscape of the media industry, and also transforming SIlicon Valley into a "media valley."

Take a look at some of our largest companies, such as Google, Yahoo, Ebay. These are media companies. These are not tech companies, you can't buy any tech from them, these are technology-enabled media companies.

They publish pages of content with advertising. What's not a media company about that?

Facebook, Twitter, Craigslist -- are all media companies, they publish pages of content and advertising. And so are most Web 2.0 companies.

Take a look at the Internet, it is a media technology. It allows you to distribute and publish web pages, data, to any computer screen, any computer platform. Now, in this second phase of the Internet, anything with a computer screen can publish back -- it's now two-way, it's read/write, we now use both sides of the glass screen.

It is Internet technologies and services, it is online companies such as Google, Craigslist, etc, that are helping to disrupt the media industry. Or more accurately, disrupt the business model.

When we talk about the death of newspapers, what we really mean is the death of traditional media business models.

On Silicon Valley Watcher, I often use the tag line: "reporting on innovation at the intersection of technology and media." Because that's what's happening, that's what I see, a tremendous intersection of technology and media. It's like tectonic plates coming together and crumpling the landscape into a new mountain range.

And mountain range is a suitable metaphor because there are always two sides to a mountain range, one side is dry and the other is wet and fertile. For example, the Andes protect and enable the massive, wet, fertile Amazon rainforest with its incredible diversity of life, while the west side of the Andes is dry and relatively barren.

The mountain range being created by the intersection of technology and media is a barrier to the traditional media companies, most don't seem to be able to climb and transition to the other side; most won't make it.

But, I'm confident we will have a new type of Amazon rainforest emerging in the media industry, we will see an amazing diversity of media companies and services. You can already see the tremendous amount of innovation emerging and we've only just started.

For example, Facebook and Twitter are very new, even to us in Silicon Valley, and they are spanking brand new for the majority of people today. What other new forms of media will we have a year from now?

We can create incredible mashups of media technologies and media formats that have never been seen before. How will we use them? How will we deal with the loss of traditional media? How will our society handle the transition? How will we pay for journalists and the vital Fourth Estate service that they provide? How do we sell products and services? How do we find trusted sources of information?

There are tons of questions waiting to be answered. And that's what's so wonderful about all of this, we are directly involved in figuring out those important answers. We, the people working in media, in communications, in marketing, in startups, we get a chance to help create and define the future.

This is why I love my job, writing Silicon Valley Watcher, and reporting on innovation at the intersection of technology and media.

Wednesday morning I took part in a lively panel discussion organized by PR Week that included John Byrne, Executive Editor, BusinessWeek; Erica Iacono, Executive Editor, PRWeek; Michael Schiferl, EVP & Director of Media Relations, Weber Shandwick; and Sarah Skerik, Vice President, Distribution Services, PR Newswire.

The topic was the results of a PRWeek/PR Newswire Media Survey 2009 (download). Among the findings: 50 percent of journalists are considering a new career in 2009! This is stunning, I can't imagine any other profession where one-half of the practicioners are seriously considering leaving by the end of this year.

John Byrne said that BusinessWeek relies heavily on its readers for story ideas; it also reveals what it's working on so that readers can get involved in the research, and that the old days of keeping story ideas secret from competitors are largely gone.

Here are some additional findings:

...The numbers of print journalists expecting a decline in their circulation and an increased focus on the Web at their outlet in the next three years is 62%, up from 55.8% last year, while the number expecting staff reductions is 42%, compared to 26.2% last year. In addition, 8% expect a shuttering of the print title and a future online-only existence, up from 2.9% last year.

...70% of journalists say their workload is more this year compared to last.

...58% of print media respondents expect their outlet to publish a regular print product indefinitely, compared to 64% last year; 11% say one to three years, compared to 9% last year; and 9% expect it to remain for another four to five years, similar to last year.

...77% of respondents have a social network profile, up from 54% last year. Of those who participate in social networking, 58% have profiles on Facebook, 51% on LinkedIn, and 28% and 22% are on MySpace and Twitter, respectively. Of those with a social networking presence, 25% publish content to those pages several times a week, while 13% do so several times a day.

...Of traditional media respondents, 43% are the author of a blog; 28% say it is for their traditional outlet, 16% blog as their own hobby; and 9% write a personal blog for the industry they cover.

...20% say they use blog searches, while 17% say they often employ company blogs. In the course of researching a story, 29% use general blogs, 25% use company blogs, and 24% use social networks. Yet, when asked how often blogs are part of research, 39% say always or sometimes, while 61% say rarely or never.

...The survey finds that 31% of journalists have been pitched via a social network. Of those who responded that they had been, 62% say they've been pitched via Facebook, 42% by LinkedIn, 18% by Twitter, and 13% by another network.

...e-mail is still the preferred method of reporters and editors, as 90% of journalists say they prefer the medium to receive unsolicited information about a company, and 80% say the platform is the best way for PR pros to reach them. Asked what the ideal PR pitch looks like, 62% of respondents reply “a personalized, concise e-mail” while 22% say a traditional press release. Only 3% say phone calls are the ideal pitching technique.

...The PRWeek/PR Newswire Survey was conducted by CA Walker. E-mail notification was sent to about 115,502 traditional journalists and 1,462 bloggers. A total of 2,174 respondents (2,091 traditional journalists and 83 bloggers) completed the survey online from January 15 through February 9, 2009.

I took part in two events today at Newcomm Forum, one of my favorite conferences. In the morning I co-hosted a roundtable with Andria Carter on New Business Models for News Organizations. It was an interesting discussion. We talked about how newspapers need to cultivate "99" separate revenue streams; how online advertising no longer works; how newspapers should learn from some successful B2B publishers such as IDG which makes good money from lead generation.

Also, people seemed to like my idea to use virtual cash as a way of developing new revenues. Virtual cash would create a separate economy in which trading for information is encouraged, and virtual cash could be used as micro payments but also to reward contributors etc. (Please see: There's Real Gold In Virtual Cash - Is This A Solution For Newspapers? )

Next: I took part in: "Social Media & Investor Relations -- Disclosure & Other Issues, with 2008 SNCR Fellow Brian Solis, SNCR Senior Fellow Tom Foremski" and Bryan Rhoads, from Intel, David Gelles from Financial Times, and Richard Brewer-Hay, from Ebay.

Despite promising new guidance because "given the speed at which technological advances are developing, and the translation of those technologies into investor tools, we expected to revisit the guidance provided..." the SEC last updated its guidelines in 2000 and 2008(!)

David Gelles made an excellent point saying that investor relations and social media don't mix. I agree, investor relations is not interested in a "conversation" about the quarterly numbers it is interested in the widest distribution of that information. Social media is merely a conduit for investor relations.

Richard Brewer-Hay spoke about his early days at Ebay as chief blogger and about Tweeting the quarterly conference call and some of the legal issues that came up.

Brian Solis made some good points about SEC disclosure to investors that company results would be available via Twitter and other channels.

Bryan Rhoads said that the chief blogging guideline at Intel is "write only about what you know." Excellent advice. Don't write about financials if you are designing chips.

When Jim Finn was running North American communications at IBM, he once told me: "I don't worry about what someone will blog at IBM and upset the SEC because I have only one CFO, I don't have 90,000 CFOs." It's a great point. The vast majority of employees don't have access to financial performance numbers and thus can't leak them accidentally and violate SEC FD rules.

- - -

Newcomm is an excellent conference, the distinction between panel and audience is that there often isn't one. You could round up three or four people from the audience and they would do just as well on the panel. That's what makes it such as good conference, it's more like a salon of peers -- not podiums :)

- - -

Please see:

Adtribution Might Be A Solution For Murdoch, A.P, Et Al, Versus The News Aggregators And Bloggers

Intel Looks Back On More Than 5 Years Of Blogging

There's Real Gold In Virtual Cash - Is This A Solution For Newspapers?

25 ideas: Creating An Open-Source Business Model For Newspapers

Why Pay-For-News Won't Work: The First Mover Disadvantage

Searching For a Viable Media Business Model: French Government Aid For Newspapers

FutureWatch: The End Of The News Aggregators And The Future Of News

Rupert Murdoch wants a Google rebellion, says Forbes. Murdoch calls Google, Yahoo copyright thieves, says Wired. Newspaper groups step up propaganda war on Google, says the Daily Telegraph. And in today's New York Times, A.P. seeks to rein in sites using its content.

The saber rattling has been going on for a while but now the battle lines are being drawn. And it is all because news is not free. News has been made available for free, and it has been made into a commodity but that is not its future because there is no future in that model. You will have to pay for it.

That means the end of the news aggregators. That means the end to arguments that the news aggregators send high volumes of traffic to the online publishers.

What is the use of more traffic when it cannot be monetized to support the work of the news organizations?

The only "news" that will remain free will be press releases--but there is little value in that type of unfiltered "news" source.

But, there may be a solution to keeping news free, one that takes advantage of the distribution power of Google, bloggers, and the large number of of social network users sharing content -- while at the same time making some money for the media companies.

In Monday's NYT article: Associated Press Seeks More Control of Content on Web

They [A.P. executives] said they did not want to stop the appearance of articles around the Web, but to exercise some control over the practice and to profit from it.

I have a solution: A content license for any online site that also publishes the content owners' designated ads.

For example, if you republish a news story you also publish alongside it one or more "adtribution" links, simple text ads with live links, designated by the content creator.

In this way, news media companies get a big benefit from having their news stories distributed for free by the news aggregators, bloggers, and online socialistas -- and their advertisers also get the distribution, which would improve ad revenues for the content producer. News would (might) remain free.

Adtribution links would "stick" with the content. These days fewer and fewer people visit a news site, they read news stories in their RSS newsreaders, or on news aggregator sites. News content is ever more becoming divorced from its web site, which means so are its advertisers.

Adtribution links could be sent along with RSS feeds and help reunite content with its supporting advertisers.

It would be simple to automate it, news aggregators and blogging software could be set up to automatically copy a set of associated live ad links, at the same time the content is copied and pasted.

Adtribution links could be attached to any shareable, embeddable media. And they could be widgetized so that their ad content could be changed at any time.

In some cases, sites that republish content might agree to run adtribution links in a permanent part of their page, so they aren't directly next to the content, for aesthetic or other reasons.

Would something like this be enough to appease the newspaper industry and keep our news free?

Will bloggers etc, be willing to republish text ads? Probably not. But they could get used to it. We can all get used to it.

I remember the hue and cry in the early days of the Internet that users would not tolerate advertising on the Internet. We got used to it, and I predict we'll get used to many more online business models. Some will work.

Here's a catchy slogan: "Adtribution supports the source." Maybe the media moguls will catch notice.

- - -

Please see:

Silicon Valley Watcher:

"Google Devalues Everything It Touches" - Wall Street Journal Chief

FutureWatch: The End Of The News Aggregators And The Future Of News

Support the Source: Creating a New Media Business Model and Keeping the Web Open

Virtual cash could save newspapers | Tom Foremski: IMHO | ZDNet.com

Newspapers: 25 things to try before turning off the lights | Tom Foremski: IMHO | ZDNet.com

Virtual currencies are booming, they have become the best way for gaming sites to monetize their content, and it might also offer a way for news sites to earn revenues. That's what popped into my head when I recently interviewed Jason Bailey, CEO and co-founder of Super Rewards.

This company today launched a virtual currency monetization platform to help primarily gaming sites earn money from their users. Some of Super Rewards customers are already making more than $1 million per month!

Gamers can convert real money for virtual money and use it in a variety of ways to gain access to higher levels, gain status, etc. But many gamers don't have to use real money, they earn it through engaging with advertisers.

The Super Rewards platform allows advertisers to offer virtual cash in exchange for a specific action, for example, signing up for Netflix, or applying for an insurance quote, etc.

Mr Bailey says that Super Rewards handles the entire transaction. It chooses an advertiser from a database of about 4,000, the advertiser pays Super Rewards if an action is completed, Super Rewards buys the virtual cash from the site owner and gives it to the gamer, taking a small cut (of real money) for itself.

"We've been able to help companies move out of their parent's garage and make a lot of money," says Mr Bailey. Many sites are making $20,000 to $30,000, and some are making more than $1 million per month. He says that this approach provides a much higher return than online advertising.

Super Rewards is also targeting virtual worlds, and games found on social media sites.

This got me thinking that this would be a great way to monetize news content. Online news is free but it isn't produced for free and newspapers, magazines and TV have so far failed to find an effective online business model.

The recent Pew Project's 6th annual survey painted a bleak picture of the state of the news media:

- online ad revenue to news websites now appears to be flattening; in newspapers it is declining..

-nearly one out of every five journalists working for newspapers in 2001 is now gone

The problem is not that there isn't an audience for online news, there is, and it continues to reach record numbers, the problem is that online advertising can't generate enough revenue to support news reporting.

The Pew survey soberly states: "It is now all but settled that advertising revenue—the model that financed journalism for the last century—will be inadequate to do so in this one."

Charging for the news through micropayments is a possible solution but micropayments have a poor track record of success.

Virtual currencies could offer the best of both worlds, providing a surrogate micropayments system, and an advertising model that pays more than CPM ads. Local businesses could provide wads of virtual currencies to online newspaper readers, either in exchange for some survey data, or as a complimentary service.

- Local businesses could provide wads of virtual currencies to online newspaper readers, either in exchange for something such as survey data, or as a complimentary service to build goodwill.

- Businesses could also provide virtual cash that could be associated with reading specific sections in a newspaper, say furniture sellers to the "Home" section. Best Buy could provide virtual cash for reading the gadgets pages, etc.

- News sites could reward readers with virtual cash for contributing user generated content, such as a popular column, or for photos.

- Virtual cash could be exchanged between blogs and other online publishers for republishing great content. And there are a myriad other creative ways virtual cash could be used in news media.

The beauty is that the virtual cash would be purchased from the news media publishers with cold, hard cash by businesses, instead of purchasing online ads. And the virtual cash then powers an entire dynamic economy within a news site that helps produce great content and provide other services.

Compare that to buying an online ad that just sits there, usually unnoticed on the side of the page.

How do you set up a virtual currency system? "That's our next product, a tool that manages virtual currencies for web sites, so that you don't have to build it yourself," says Mr Bailey. That would be great for news media sites.

It's these types of monetization technologies, borrowed from other publishers, in this case games publishers, that news media businesses would do well to investigate and adopt. What do they have to lose?

By the way, what should be the name of a virtual currency in the news media world? My suggestion is "lede" it rhymes with seed and it is very specific to journalism, it denotes the first sentence of a news story.

[This is a 2 lede article.]

---

Please see:

Why Small Payments Won’t Save Publishers « Clay Shirky

Pew Survey: Online Journalists See Glass Half-Full As 2009 Expected Worst Ever In News Media

25 ideas: Creating An Open-Source Business Model For Newspapers

"Google Devalues Everything It Touches" - Wall Street Journal Chief

The first survey of nearly 300 online journalists by the Pew Project for Excellence in Journalism found "uneasy optimism" compared with colleagues in traditional media and concern that the Internet "is changing the fundamental values of journalism."

They were also more likely to express confidence that a profitable online business model would be found. Most reported staff increases in their organizations.

The survey results form part of the recently released Pew Project's 6th annual survey of the US news media, a depressing read. More than 180,000 words of it on 700 pages.

I pulled out a few extracts:

- Newspaper ad revenues have fallen 23% in the last two years.

- Growing by a third annually just two years ago, online ad revenue to news websites now appears to be flattening; in newspapers it is declining.

-Some papers are in bankruptcy, and others have lost three-quarters of their value.

-By our calculations, nearly one out of every five journalists working for newspapers in 2001 is now gone, and 2009 may be the worst year yet.

- In local television, news staffs, already too small to adequately cover their communities, are being cut at unprecedented rates; revenues fell by 7% in an election year—something unheard of—and ratings are now falling or are flat across the schedule. In network news, even the rare programs increasing their ratings are seeing revenues fall.

- Perhaps least noticed yet most important, the audience migration to the Internet is now accelerating. The number of Americans who regularly go online for news, by one survey, jumped 19% in the last two years; in 2008 alone traffic to the top 50 news sites rose 27%.

- Yet it is now all but settled that advertising revenue—the model that financed journalism for the last century—will be inadequate to do so in this one.

- In trying to reinvent the business, 2008 may have been a lost year, and 2009 threatens to be the same. Imagine someone about to begin physical therapy following a stroke, suddenly contracting a debilitating secondary illness.

- The problem facing American journalism is not fundamentally an audience problem or a credibility problem. It is a revenue problem—the decoupling, as we have described it before, of advertising from news.

Several interesting special reports:

-There is one on citizen-based media, including a university study of 363 citizen websites in 46 markets.

-There is an essay by Bill Kovach and Tom Rosenstiel on the Lessons of the Election.

-There is a backgrounder on the growing models of entrepreneurial journalism, new Web news organizations run by professional journalists outside the mainstream press.

-There is a review of changes in the last year in public attitudes.

Here are the direct links to the different sections of The State of the News Media 2009:

[Matt Hulett- CEO of WidgetBucks]

Online advertising is becoming less and less effective. Eric Clemons has some ideas on why this is happening, and there are many startups trying to fix the problem.

And it is a very significant problem because it affects the business model for nearly all types of online publishers. If online advertising continues to fall in its effectiveness then there will less and less revenue support for content creators, such as newspapers and magazines.

WidgetBucks, based in Seattle is one of those companies that are working on making Internet advertising more effective. It offers clients an advertising "container" or widget, that provides better contextual delivery of adverts, and a much richer user experience, which results in more effective advertising.

This part of its business has already been extraordinarily effective, helping publishers gain higher revenues than through advertising networks such as Google AdSense, etc.

"What we do is we optimize the ad networks so that they deliver ads that are more relevant to the site, and that can make a big difference for advertisers and the publishers," says Matt Hulett, CEO.

The company is also working on making the content of its advertising "containers" more interesting and it is experimenting with combining ads with online games and other types of media that engages Internet users. "Engagement" is the term du jour these days as advertisers seek new formats that will work better than current ones.

"It wasn't too long ago that people were pleased if 1 per cent of their ads got a click through, these days they are pleased if it is 0.1 per cent," says Mr Hulett.

The widget approach to advertising means that WidgetBucks has an open window on the publisher's site and it can carry out A/B testing to optimize advertising delivery based on a large number of variables. It can then apply those lessons across other sites.

"For example, on a consumer gadget site, we track what works and what doesn't and then we can feed the right types of ads onto all similar sites. That increases the effectiveness of the ads and the advertiser makes more sales, and the publisher gets more ads -- everybody benefits."

Publishers love the service and there are about 26,000 publishers now using WidgetBucks.

A $9 billion opportunity . . .

But there is more, much more to be done, says Mr Hulett. The company is testing out a new service that addresses a massive $9 billion optimization opportunity.

"About 30 per cent of online ads are not viewed because readers don't scroll down the page. Last year PricewaterhouseCoopers estimated that advertisers are paying about $9 billion for adverts that are not seen," says Mr Hulett.

WidgetBucks will release details in the second quarter on a new service that lets advertisers eliminate payment for unseen ads.

But won't that hurt many online publishers such as newspapers? They'll be receiving billions of dollars less at a time when they are struggling to increase revenues.

Mr Hulett says publishers will benefit because they will be able to charge more for the better performing ad positions. "And you can also eliminate cluttering up the page with lots of adverts, it'll be better for readers."

- - -

Foremski's Take:

There is a well known maxim in the advertising business that 50 per cent of all advertising spending is wasted -- but you can't tell which 50 per cent.

In online advertising you can use an arsenal of analytics technologies that will tell you which 50 per cent is being wasted. And as more and more advertising moves online, the potential cost savings for advertisers are enormous.

That's why there is a tremendous amount of VC money, about $500 million by some estimates, being invested in startups such as WidgetBucks, that are focused on developing advertising optimization technologies. This will result in advertisers having ever finer control over the ad format, timing, and targeting of their adverts. This will increase the effectiveness of online advertising and reduce costs.

However, I don't buy the argument that publishers will benefit to the same degree as advertisers. The cost savings have to come out of someone's pocket. For example, eliminating $9 billion in payments for unseen ads won't help publishers -- unless they move to a format where they only publish pages that are the size of one display screen. Even if that were to happen, there would still be plenty of ways of optimizing ads and saving money.

The transition to online publishing means advertisers no longer have to pay for ineffective advertising. And that's why we now have a media industry going through a tremendously disruptive period.

It was the 50 per cent of the "wasted" advertising spend that was supporting the media industry: newspapers, magazines, TV, radio, etc. It was helping to under-write the creation of content and support millions of jobs: journalists, editors, photographers, camera operators, delivery truck drivers, printers, producers, camera operators, administrators, etc.

Better optimization of advertising will save billions of dollars for advertisers but it will mean even less money for online publishers, and for journalism as a whole.

Without good journalism our society will be more vulnerable to disinformation and it will lessen its ability to make good decisions on very important subjects such as the economy, global warming, healthcare, education, foreign policy. Software engineers have a saying: garbage in, garbage out.   

I believe we will eventually find a way to pay for quality journalism but we will have to go through a very troubling transition. That's not the fault of companies such as WidgetBucks, it's just the way things are, this is what the Internet enables.

- - -

Please see:

Latest News From WidgetBucks

WidgetBucks Blog:

Three Reasons Why Amazon Should Buy Twitter

All the chatter in the mediasphere about the death of newspapers (and TV) makes the subject of media seem so morbid. But, we have more media happening now than at anytime in humanity's existence.

We have more media, in more formats, and at anytime we choose. We consume more media today than ever before. [It's just that we haven't yet figured out how to make money from it (but we will).]

These are the best times to be a media or PR, imho.

I spent 20 plus years working as a journalist in Silicon Valley, interviewing people about the work they were doing on a chip, software application, or one of many technologies. These days people are looking over my shoulder, and that of my colleagues in journalism and PR, looking at what we are doing with a plethora of media technologies.

Silicon Valley has turned into a Media Valley, because so many of our large and startup companies are essentially media companies. They are technology-enabled-media-companies, they sell advertising around content. That's true for Google, Yahoo, Ebay, Amazon, Craigslist, and it is true for many smaller companies, Web 2.0 companies, etc. And the rise of social media is just a continuing part of this trend.

As journalists or PR/corporate communications people, we are in the middle of a unique period in history. I think it is very likely that we will never, ever, experience this kind of disruption that is happening in our industries, in our lifetimes, again.

It's not a pleasant time for many, because the chief quality of disruptive technologies are that they are disruptive. But, these are also incredibly creative opportunities.

There are so many questions and so few answers, and that's great. Because we all get a chance to figure things out, we all get a chance to make mistakes and create the best practices that will become part of the future. We get to discover the new rules of story telling and communications. And that's what gets me out of bed.

Andrew Ross Sorkin, a reporter at the New York Times, took a contrarian position on Tuesday, writing an opinion piece that defended the multi-million dollar bonus payments by AIG.

. . . If government officials were to break the contracts, they would be “breaking a bond,” Ms. Meyer says. “They are raising a whole new question about the trust and commitment organizations have to their employees.”

. . .as unpalatable as it seems, taxpayers need to keep some of these brainiacs in their seats, if only to prevent them from turning against the company. In the end, we may actually be better off if they can figure out how to unwind these tricky investments.

One problem with Mr Sorkin's argument is that many of the people receiving multi-million dollar job retention bonuses have already left AIG. And the other problem is that these people are being rewarded for creating a financial mess that is being paid for by tax payers.

Why would the New York Times deliberately choose such an unpopular position? By mid-Tuesday afternoon it received more than 3,000 protest emails and more than 1500 comments.

There is a great newspaper tradition of crusading journalism, muckraking . . . pointing out corruption, and bringing down the high and mighty. That's the kind of journalism that is missing these days.

From: Muckraker - Wikipedia

. . .Roosevelt saw benefits and disadvantages to muckraking activity. He declared that although these men did good work when they scraped up the ‘filth’ of America, "the man who did nothing else was certain to become a force of evil.”

. . .these journalists, through their research and constant exposure of the wrongdoing by officials in American public life, gave fuel to protests that led to investigations and later on reform of not only Corporate America but the American Government. The Muckrakers’ journalistic efforts helped reform and regulate Wall Street and aspects of big businesses.

I try to be a muckraking journalist when I can. I was a huge big critic of Yahoo's policy towards China, actions that led to a ten year prison sentence for a Chinese journalist when Yahoo revealed his identity.

And Yahoo eventually pulled out of China. I'm not saying it was due to SVW muckraking . . . but, I am saying that we need more muckraking. Especially during these times when journalists are being blamed for not sounding the alarm on our broken economy.

Why isn't the New York Times muckraking? Surely it's not waiting for a better opportunity?

- - -

Please see some SVW muckraking on Yahoo and China:

Despicable behavior by Yahoo management - Shi Tao gets ten years

Chinese Internet Rep Flees From UK Reporter

11.07.06: 24 hours against censorship

Dissidents within YHOO and GOOG will make ethical companies

A View from Within on US Companies and China

1.8.07: Google in China

US Tech Firms Lame Excuse on China Business

Chinese Dissident's Wife to Sue Yahoo

Hong Kong Lawmaker Continues Attack on Yahoo over Journalist Jailing in China

Yahoo gives $1m to fund research into "international values"

Newswatch 8.6.07: Did Yahoo Lie about Chinese Dissent?

Yahoo moves for dismissal of dissidents' case

Newswatch 11.8.07: YHOO's China troubles

Would You Work For Moral "Pygmies?" - The Costs Of Yahoo's Actions In China

I recently discovered Hank Williams who writes a blog titled "Why does everything suck?" It is well written and often makes some very good points. Mr Williams is a tech entrepreneur based in New York.

I was particularly struck by his post from late September called "You Really Can't Get Something For Nothing." The financial world was collapsing at the time (it still is) and Mr Williams was berating our society for trying to make money from nothing much at all, from the rising value of homes, from shuffling money from column A to column B, etc.

He says that China now produces things of value but the US now produces very little of value. It's a well worn analogy but it still is an apt analogy. He then takes the tech economy to task for creating little of productive value.

In the tech economy, in the last five years we have produced very little that actually makes any of our lives better. Twitter is cute, but economically unproductive. Ditto Friendfeed. Ditto (fill in the blank with your favorite social media platform). These products are economically neutral. And that is not a good thing. To those of you that would argue with me on this point, I defy you to explain the real world economic value/impact of the social media revolution. How does it help increase the real world GDP even one little tiny bit. I dare you. I double dare you. You can’t do it. Because if all of it went away, the world would be the same the next day.

He points out that prior technologies such as word processors, spreadsheets, databases, email, etc, did create value, they did improve people's productivity.

Social media is the first major computing revolution that as far as I can tell, has produced essentially nothing.

He goes on to point out that social media "is perfectly fitting in a society where producing nothing has been in fashion for years. Mortgages without credit. Profit without product. Riches without risk."

Ouch!

Is he right?

Social media certainly seems like it doesn't produce anything of value, that it doesn't help productivity. I spend way too much time on Facebook, Twitter, etc, and I seem to be spending more time there every day.

For my job, however, I do see value and I do see productivity. I use social media to let people know about my work -- it's a very effective distribution channel. I also get to know my readers better. When I was working at the Financial Times we had to set up surveys and panels to figure out who was reading what and what they thought of it.

Social media it also a very good research tool, I can find sources, and I can find information about topics I am writing about faster than before. It does make my work more productive.

But is this true for other professions? Does social media make you more productive at what you do? Is there value in social media.? Or is Mr Williams right when he writes, "if all of it [social media] went away, the world would be the same the next day."

(Building from yesterday's post...)

I'm just one of many people coming up with business ideas for saving newspapers. There are a lot of posts being published on this subject.

Someone should collect all the advice because it's turning into some kind of open source business model. And the beauty of this approach is that only a few newspapers need to have the courage to try new ideas--if any one of them succeeds then the rest can piggyback. They win and we win.

Here are my 25 ideas on how newspapers might be able to survive and become innovative media businesses:

1: Focus on original content, do not rewrite wire stories or press releases. If newspapers start charging for content people are more likely pay for content they can't get anywhere else.

2: Focus on hyper-local coverage, newspapers should "own" their regional beat because they have the best contacts and the best understanding of local companies and issues. For example, SF Chronicle or the San Jose Mercury should be breaking all the top Apple or Google stories.

3: Don't run foreign bureaus unless you are the New York Times or the like, or are publishing a unique perspective relevant to your community.

4: Be a regular and visible part of your local communities by making sure journalists get out of the office.

5: Become an active teacher of media literacy and also media production in your local communities. Help teach citizen journalists how to be great journalists, editors, photographers, videographers, etc. Teach how to be effective and ethical.

6: Celebrate the best citizen journalists/bloggers in your communities, publish them on your platform.

7: Become involved in local events, organize conferences. There is a lot of money in conferences. The newspaper becomes a vehicle for drawing people to the conferences.

8: Don't let advertising networks sell your advertising. They take a huge cut for serving ads and you lose the customer connection. I often see newspapers running Google AdSense on their front page and at the bottom of the ads there is the message: "If you'd like to advertise on this site click here." That click takes prospective customers to Google and not to the newspaper. Newspapers should always own their customer relationship.

9: Develop a hybrid content strategy for search engines and news aggregators that takes advantage of the distribution power of the Internet without giving away all the content.

10: Adopt a culture of a "news organization" rather than a "newspaper." Paper or electron, it shouldn't matter how the news is delivered.

11: Offer some way for readers to pay. Every newspaper has a group of fiercely loyal readers, some more than others, but there is no way for them to pay if they want to read their newspaper online. Many people like the positive ecological aspect of reading online and are proud they are saving resources--and many would be willing to pay for this vastly improved product yet the newspapers don't offer any way to collect this easy revenue. One way might be witha PBS-style volunteer membership package? With discounts among local businesses.

12: Become the host for all important discussions about local issues and politics. Moderate the discussions to ensure civil discourse. Nothing kills discussions faster than offensive comments made by anonymous people.

13: Newspaper journalists need new publishing skills in video, audio, images, and should have some basic knowledge of HTML and CSS. Being able to type is not enough.

14: Help raise money for schools and other essential local services. Show you are part of the community.

15: Create a safe online experience, free from phishing, malware, and adverts for scam services.

16: Create a search site to search local resources and businesses.

17: Create a news aggregation site that provides your readers with access to news and other articles available elsewhere.

18: Each newspaper section should provide a search engine specific to its topic and region: Business: Company information and financial services. Home: Search for builders, furniture, decorators. Food: Search for recipes, local restaurants, etc.

19: Offer free classified adverts online and also have a free section in print. You can charge for a premium listing that offers better visibility.

20: Create informational pages to help people in your communities with common tasks such as how to get a business license. Where to find your car if it has been towed. Information for people that have recently moved into the area. In different languages. Have your web people create pages that are mashups of available online data but presented in a more accessible form, such as mapping police reports onto regional maps. School information, etc.

21: Hire additional salespeople. It is is a different sales environment today and it requires a fresh approach. Salespeople used to selling full page or half-page print ads are not the going to be able to transition easily.

22: Host web sites for important community groups in your region for free. You can run advertising on them and the groups will benefit from having an easy way to publish online.

23: Create a way of allowing readers to share in the ownership of the newspaper, or somehow give them a role in what the newspaper should be doing to become more useful to its community.

24: Create a directory of local businesses with space for user comments. Offer premium listings for a fee that also shows the business is supporting the newspaper, with a sticker. Yellow pages is a huge local business that the newspapers could easily own.

25: What are your ideas for helping newspapers transition into the online world?

- - -

Please see:

- Why Pay-For-News Won't Work: The First Mover Disadvantage

- "Google Devalues Everything It Touches" - Wall Street Journal Chief

- Bye-Bye Free News - Murdoch Joins The Pay Debate

- Saturday Post: The Inevitable Rise Of Cockroach Media . . .

- Pandora's Box 1981: The Online Newspaper Experiment

Newspapers would like to be paid for their online content because they can't survive on online advertising alone.

Pay-for-news might work but only if newspapers have original content, "you can only read it here." That's what I try to do with SVW, I try to have original interviews, scoops, original angles -- stories that you can only read here.

But a lot of newspapers don't have much original content. They use a lot of wire copy or simply rewrite the wire copy; they publish news stories that look very much the same as other news stories; there is little competition to get scoops.

If a newspaper can generate a lot of "you can only read it here" content then there is a halfway decent chance that it can find enough people to pay for it. And there is a lot of potentially original content to be had by focusing on hyper-local coverage.

But a lot of newspapers have journalists that sit at a desk all day long and rarely interact with their local communities.

Some newspapers have recently come up with the concept of MoJos -- mobile journalists equipped with notebooks, cell phone modems, and cameras. Isn't that what journalists used to do, go out into their communities and hunt down stories, hangout in bars, cafes, look for original stories, scoops?

Newspapers should own their local stories. For example, San Jose Mercury or the San Francisco Chronicle should "own" Silicon Valley stories. They should be breaking all the best Google stories, Oracle, Apple, etc. That would be something people would pay for.

Here are some ideas on how newspapers could survive and become viable businesses:

- Focus on original content, do not rewrite wire stories or press releases--people are more likely pay for content they can't get anywhere else.

- Focus on hyper-local coverage, newspapers should "own" their regional beat because they have the best contacts and the best understanding of local companies and issues.

- Don't run foreign bureaus unless you are the New York Times or the like, or are publishing a unique perspective relevant to your community.

- Be a regular and visible part of your local communities by getting out of the office and into those communities.

- Become an active teacher of media literacy and also media production in your local communities. Help teach citizen journalists how to be great journalists, editors, photographers, videographers, etc. Teach how to be effective and ethical.

- Celebrate the best citizen journalists/bloggers in your communities, publish them on your platform.

- Become involved in local events, organize conferences. There is a ton of money in conferences.

- Don't let advertising networks sell your advertising. They take a huge cut for serving ads and you lose the customer connection. Newspapers should always own their customer relationship.

- Develop a hybrid content strategy for search engines and news aggregators that takes advantage of the distribution power of the Internet without giving away all the content.

- Adopt a culture of a "news organization" rather than a "newspaper." Paper or electron, it shouldn't matter how the news is distributed.

- Online readers that want to pay, have no way of paying for the the news except by buying a newspaper subscription! PBS does quite well with membership packages that include discounts from local businesses, while keeping broadcasts freely available. That's a model that could be offered by newspapers.

- Become the host for all important discussions about local issues and politics. Moderate the discussions to ensure civil discourse. Nothing kills discussions faster than offensive comments made by anonymous people.

- Newspaper journalists need new publishing skills in video, audio, images, and should have some basic knowledge of HTML and CSS. Being able to type is not enough.

- Help raise money for schools and other essential local services. Show you are part of the community.

- Create a safe online experience, free from phishing, malware, and adverts for scam services.

- And there are lots of other ideas...

There are many people coming up with great suggestions to help newspapers survive. There is probably no other industry that has so many people willing and eager to help out with ideas. For example: - How to mend what isn't really broken! - Jan Simmonds

Newspapers have a unique opportunity to reinvent themselves. In some cases it means rediscovering what they used to do, and what they used to know: original content sells. You can only read it here.

The other opportunity is to innovate and create new forms of media that have never ever been created. There is a tremendous amount of innovation happening in media.

I've said it many times: Silicon Valley has become a Media Valley. Google publishes pages of content with advertising. So does Yahoo, Ebay, and many others. Facebook is a media company, and so are thousands of startups in the "Web 2.0" space.

Why aren't newspapers part of this innovative media industry?

- - -

Please see:

- Why Pay-For-News Won't Work: The First Mover Disadvantage

- "Google Devalues Everything It Touches" - Wall Street Journal Chief

- Bye-Bye Free News - Murdoch Joins The Pay Debate

- Saturday Post: The Inevitable Rise Of Cockroach Media . . .

- Pandora's Box 1981: The Online Newspaper Experiment

As newspapers lose revenues from their print business they are forced to rely on revenues from their online business. But their costs of running a news organization are far higher than their online revenues.

Print advertising was once able to cover the costs of running a newspaper and do it profitably. But online advertising cannot cover the costs of running a news organization--even when online readership is larger than paper readership and growing.

This problem of more readers, yet declining revenues, is frustrating the newspaper industry. Lately, there has been a tremendous amount of discussion within the newspaper industry on this issue and the emerging consensus is that readers will have to pay for the news. It might be micropayments, it might be a monthly subscription, but the era of free news is going to go away.

The Wall Street Journal is a good example of a business model that appears to be working--it offers some free news but it charges a subscription for most of its news. And this seems to be the type of business model with the most support among newspaper publishers.

But who will go first?

The Wall Street Journal is a specialist newspaper without much competition. Daily newspapers have a broad range of news content and there is a lot of overlap in their news stories. Any metropolitan daily newspaper will have many of the same stories as any other metropolitan daily.

They all use a tremendous amount of wire copy from Associated Press, Reuters, Dow Jones, Bloomberg, etc, even if the newswire stories are from their locality. This was fine when newspapers monopolized their regions because you couldn't get that news in any other way.

Now, thanks (or no thanks) to the Internet, newspapers thousands of miles from each other compete for the same readers. A columnist in Chicago now gets to compete against a columnist in New York or Philadelphia. A movie reviewer in San Diego now competes against a movie reviewer in Toronto.

Most newspapers have very low brand loyalty. More than 60 per cent of newspapers' web site traffic comes from search engines and news aggregators -- and not from people going directly to their site.

This is the first mover disadvantage. Lock up your content behind a paywall and your readers will find free news stories elsewhere.

There is a last mover advantage. The last newspaper to charge for content wins, at which point they'll also have a huge readership collected from all the other newspapers.

This is why pay-for-news won't work.

So what is the solution? How can newspapers transition to becoming viable news organizations that make money through paper or electron?

It's a situation best described by the Maine saying: "You can't get there from here." It's a phrase that doesn't seem make any sense but it makes perfect sense in this context: The mainstream media world cannot transition to the newstream media world of online revenues. Your online revenues cannot support the costs of your news organization. You can't get there from here.

This is why the Internet is a disruptive technology. And the key point about a disruptive technology is that it disrupts. It disrupts individual companies and entire industries. Even though you can clearly see the train wreck way ahead of you, you can't get out of the way, you cannot downsize quickly enough, you cannot change tracks quickly enough--you slam into it.

The newspaper industry clearly sees the train wreck of its print business model way ahead. It will slam straight into it.

- - -

Please see:

- "Google Devalues Everything It Touches" - Wall Street Journal Chief

- Bye-Bye Free News - Murdoch Joins The Pay Debate

- Saturday Post: The Inevitable Rise Of Cockroach Media . . .

- Pandora's Box 1981: The Online Newspaper Experiment

Charlie Rose today started a series on the future of journalism.

A conversation about the future of newspapers with Walter Isaacson of "Time," Robert Thomson of "Wall Street Journal" and Mort Zuckerman of "The New York Daily News"

It was a fascinating discussion about micropayments, subscription models, and how newspapers can adapt to the challenge of low online ad revenues. And Poynter.org produced an excellent transcript.

Robert Thomson, Managing Editor of the Wall Street Journal, said many interesting things that showed a deeper understanding of the issues than the other panelists.

Mr Thomson said, "Google devalues everything it touches. Google is great for Google but it's terrible for content providers." He said that Google doesn't distinguish between the quality of the content around which it serves up ads, it is concerned with quantity rather than quality.

Walter Isaacson agreed. "Also, what Google does is it allows ads to be spread all over the Web. You can go to Google ad servers and put ads on any site there is."

Mort Zuckerman didn't think that micropayments for news articles would work. He said "We're ready to be the second or third newspaper that does that."

Mrt Zuckerman placed his hope in a new printing press. "You get a premium from advertisers if you have color."

Charlie Rose said,"But you're saying maybe the only thing that your new business model has in it is a better printing press and a cheaper printing press?"

Mr Thomson laughed off camera. Mr Zuckerman said, "Well, it's not -- yes, well, it's more efficient. We don't like to call it cheaper."

Mr Thomson supported Mr Zuckerman's belief that newspapers wouldn't go away. "I think Mort is on to something. Dead trees are definitely not dead. . . the idea of spending 30 minutes with any medium, with -- and the only multitasking you're doing is drinking a cup of coffee, that does make newspapers unique. And actually if you talk to ad people, they're starting to recognize that."

Mr Isaacson said nice things about citizen journalists and bloggers. "We're getting citizen journalists, bloggers, that are adding immensely to the wealth of information that we have."

He said that citizen journalists should be paid. "I think what you are trying to do is incent good, decent people who want to cover their town planning meeting or become citizen journalists or write blogs that are actually worth reading. You want them to be able to do it not just as an ego kick or as a hobby or as a civic contribution, but have people who have to put food on their table be able to afford to be citizen journalists, afford to be good bloggers."

The most important point was said by Mr Thomson: "Every newspaper is of itself a great brand, and to have brand value on the Web is to have a great advantage."

Mr Thomson has a better understanding of the issues because he spent several years as Editor of The Times newspaper in London. British newspapers have been able to adapt to, and exploit the Internet, in ways that US newspapers are only now learning.

[I used to work with Mr Thomson when he was Editor of the Financial Times in the US. And I met with him on a recent trip to New York. He said that on The Times, they had a team of people making sure that the news stories could be easily indexed by Google, but US newspapers are only just beginning to do the same.]

- - -

Please see:

Poynter.org has an excellent transcript here:

And I begin with you, Walter. Tell me how bad is it, from all the surveys that you took in putting this piece together, and what's a modest proposal?

WALTER ISAACSON, ASPEN INST.: I think it's pretty bad, because I think we've realized after the fourth quarter of last year in which Web advertising for newspapers started to decline, that Web advertising wasn't going to continue to shoot up and form a business model where you could keep giving away newspapers for free online and hope that Web advertising would support it.

Poynter Online - Romenesko

Here is the video of the Charlie Rose segment.

Murdoch Exhorts NYTimes.com to Charge for Content - Media Buyer Planner

Media emperor Rupert Murdoch is advocating charging an online subscription fee for The New York Times, much like the model currently in use by his own paper, the Wall Street Journal.

Last year I came to the conclusion that the only way to save good journalism is to charge money for it. Online advertising simply cannot cover the costs of journalists, editors, foreign bureaus, photographers, videographers, production editors, sub-editors, admins, web production staff, software engineers, media engineers, offices, pension plans, admins, electricity, travel, healthcare, IT infrastructure . . . and lunches. In recent weeks a lot of my leading figures in the media have come to the same conclusion.

(Please see: FutureWatch: The End Of The News Aggregators And The Future Of News)

News is not a commodity, it just seems that way because it has been offered for free. News releases (press releases or social media releases) are a commodity, and freely available because they aren't "news stories," they are one-sided communications from corporations or their agents.

There is a growing realization that the right business model for newspapers is to charge money for the news. There is a lot of debate about how to do it, if it should be micro-payments, or if it should be a subscription for a package of news, or some other method.

The most important thing is that there is a broad realization that the free news business model is not viable. Whether we like it or not, some of the news, at least from quality news organizations, will no longer be free.

I often hear the argument that people have gotten used to free news and so they won't pay for it, they'll get their news from bloggers, from other sources on the Internet. That's fine, that's their choice, people can try their luck looking at free news on the Internet and figuring out if they trust the source. If they have time on their hands, they can research if a news story is true, or has been "hacked," and if it can be trusted.

I believe that there will be enough people that will want to save time and go straight to a trusted source and pay for the news. That's the beauty of the Internet, it is not "either/or" it's "and."

Some people will remember the early days of the Internet and how the first online advertising created a controversy -- people said Internet users wouldn't accept being subjected to advertising. Well, people did accept advertising. People will accept paying for online news.

It is worth pointing out, that like in those the early days of the Internet, these are still the early days of the Internet. We'll get used to these changes and plenty more.

- - -

Please see:

Brill's secret plan to save the New York Times and journalism itself

A business model that is based uniquely on expensive editorial quality but that derives revenue only from advertisers who only indirectly use or pay for that quality is a business model that cannot work. There is simply no example, not one – in print, on line, in television – of quality content offered for free ever resulting in a viable business.

Let's talk about the economics of great journalism

Media innovation cannot be dependent on advertisers, they will not take the risk. Innovation must find a foothold with people who demand that great news be available.

Can the Press Fix Itself? | American Journalism Review

Brill is absolutely convinced of the soundness of his opinion — publishers have to raise their self-esteem, treasure what they do and get righteous about charging for it on the Internet. It's not the answer to how the press could have fixed itself a decade ago. For Brill, it's the answer to what needs to be done today.

New York Times, Other Newspapers Should Charge for Online News Content - John A. Farrell (usnews.com)

This is capitalism, folks. Nothing worth something is free. A free press is worth 15 cents a day.

Cloud Journalism and the Fate of Beats

Jobs -- including jobs in journalism -- just aren't what they used to be. Earlier this week, consultant Robert Patterson observed after reviewing trends in unemployment statistics that "the idea of a 'job' as a full-time object that can support a person or even a family, is disappearing."

Printing The NYT Costs Twice As Much As Sending Every Subscriber A Free Kindle

Not that it's anything we think the New York Times Company should do, but we thought it was worth pointing out that it costs the Times about twice as much money to print and deliver the newspaper over a year as it would cost to send each of its subscribers a brand new Amazon Kindle instead.

New York Times (NYT): Subscriptions Are A Great Idea!

Two weeks ago, we detailed our plan to save the New York Times (NYT):

   * 40% cost cuts by 2010

   * Increased print subscription price

   * Implement online subscription fee

For the latter, we were roundly blasted by socialist digerati, who regard subscriptions as heresy.

Well, we're glad to see there is intelligent life where it counts--at the New York Times. Editor Bill Keller says the paper is committed to getting consumers to pay for its content and will explore the idea of online subscriptions. We only hope Bill's wisdom finds its way upstairs!

FutureWatch: The End Of The News Aggregators And The Future Of News

CES in Las Vegas was made more tolerable because of the good company of fellow journalist blogger Paul Mooney. One late night we were discussing the media industry, an occasional favorite topic of mine.

We were discussing how the economic situation was going to accelerate the broad disruptive trend within the media industry.

Less advertising would lead to a faster rate of job losses, and lower revenues for most, if not all media companies, and that also includes many newer media companies, Gawker Media for example. Simply put, it's not a good time to be in media--mainstream or newstream.

More recently, the Wall Street Journal cut 25 newsroom jobs.

Here is part of a memo to staff from Robert Thomson, Managing Editor of the Wall Street Journal:

It is obvious to you all that we are in the midst of an unprecedented economic downturn. We are also in the midst of an unprecedented increase in our readership, in print and online, but a precipitous decline in print advertising revenue has forced a close examination of our structures and of our costs.

It points to a curious anomaly within news organizations, that readership is often rising but revenues are falling.

And the reason is that advertising is less expensive online but news creation costs remain the same. The cost of being in the news business isn't being covered by online advertising revenues.

Media companies such as Google and Yahoo can sell online advertising at low rates and cover their costs but Wall Street Journal and other news organizations cannot survive without shrinking their productive resources, which can create a downward spiral of less content, and less revenue.

When journalists lose their jobs it's tough because they also lose their publishing platform. They lose their byline, they disappear from public view, and that makes it more difficult finding a job. And even when better economic times return, the majority of journalism jobs won't ever return.

In Las Vegas, Paul Mooney and I were thinking that we are in a better position than many of our colleagues in the media because we don't have far to fall. As long as we can keep the lights on, and maintain an Internet connection, we can still keep publishing during bad times, and worsening times. If you lose your job at a news organization you lose your public persona--a journalist that isn't publishing isn't.

We joked that we represent a new type of media: cockroach media. Paul is from New York where cockroaches can be formidable in their ability to survive the harshest environments. He says, "I've given cockroaches some of my best hits and they still manage to crawl away."

Cockroach media will survive this economic downturn a lot better than old and new media companies. And cockroach media should do well once the inevitable upturn comes around.

- - -

Cockroach media:

Paul Mooney Living, Linking and Learning

It's a question that I ask myself and I've seen other people ask it: Is the media coverage of the economy harming the economy?

By which I mean, the negative stories about the economy, the personal stories of families and individuals dealing with loss and the unpleasant results of this tough economy.

The health of an economy seems influenced by culture, positive outlook, and reality. And media plays a key role in helping to shape at least two of those components. Therefore, should media be more positive in its coverage of the economy, would that make a difference?

Let me know.

BTW:

In the interests of transparency here are some of my "holy-shit" posts about the economy:

- Japan's King Kong And Godzilla Scale of Industry Destruction

Saturday Post: Globalization Comes To A Screeching Halt . . .

Saturday Post: Are These The Four Horsemen Of The Financial Apocalypse?

Beyond The Sub-Prime Bubble: The Other Seven Deadly Bubbles . . .

The Size of Derivatives Bubble = $190K Per Person on Planet

Here is the start of a new series: BoomWatch on companies that are booming despite the gloom:

- Tibco: Wrapping Metal Around Software

- Boom Not Gloom: IT Search Firm Splunk

Update: How Bad Is It? :: Swampland - TIME.com

I was looking for a quote by Ted Nelson, the iconic (not graphic) computer engineer and maverick thinker, and enjoyed the trip hunting for the quote. Mr Nelson is known by many for his work on the Xanadu project, which was a form of highly advanced hypertext linking technology predating the web.

Sometimes Mr Nelson is described in these terms:

While the World Wide Web may owe much of its inspiration to Project Xanadu, Nelson himself is an opponent of the Web, the Internet, XML, and all embedded markup.

Here is a small taste of Mr Nelson and his sharp thinking:

No one's life has yet been simplified by a computer.

- - -

In 1974, computers were oppressive devices in far-off air conditioned places. Now you can be oppressed by computers in your own living room.

- - -

Why are video games so much better designed than office software? Because people who design video games love to play video games. People who design office software look forward to doing something else on the weekend.

- - -

I see almost no difference between the Macintosh and the PC. The Macintosh interaction is much better tuned, but it's the same conceptual structure, the PARC User Interface (PUI) with ordinary hierarchical directories now called "folders".

Calling a hierarchical director a "folder" doesn't change its nature any more than calling a prison guard a "counselor".  (Zimbardo's prison experiments showed that prison-guard behavior is structural, and so are the effects of hierarchical directories.)

- - -

Strange-- nobody believes that God created computers. Therefore we are under no divine obligation to use them according to tradition. We are, in principle, free to start over. But most people do not dare think about it. I say it's high time.

I agree with a lot of Mr Nelson's thinking.

The mission statement of Project Xanadu describes a technology that we definitely need:

DEEP INTERCONNECTION, INTERCOMPARISON AND RE-USE

Since 1960, we have fought for a world of deep electronic documents-- with side-by-side intercomparison and frictionless re-use of copyrighted material.

We have an exact and simple structure. The Xanadu model handles automatic version management and rights management through deep connection.

Today's popular software simulates paper. The World Wide Web (another imitation of paper) trivializes our original hypertext model with one-way ever-breaking links and no management of version or contents.

Here are some key concepts:

Transliterature:

"How can computer documents– shown interactively on screens, stored on disk, transmitted electronically– improve on paper?" Our answer was: "Keep every quotation connected to its original source."

Transpublishing:

An author may legally use this system to quote from other Web pages on a new Web page, without contact the owner, without paying, and without violating copyright.

It works like this: The materials appear on the Web page, but the transquoter does not deliver the materials at all, even though they look that way on the resulting page. There are several good reasons for this. One is that it avoids the copyright problem-- because the republisher has not made or sent a copy.

SO EACH TRANSQUOTATION COMES, IN EFFECT, FROM THE ORIGINAL PUBLISHER; THE ORIGINAL PUBLISHER SUPPLIES THE QUOTATION TO EACH USER.

Transcopyright:

The on-line copyright problem may be resolvable by a simple, sweeping permission method. This proposed system, which anyone may use, allows broad re-use of materials in exchange for automatic tracking of ownership. Payment goes to the original publisher and credit to the original author. Nothing is misquoted, nothing is out of context (since the original context is immediately available), and users are not spied upon.

Here is more...

. . .technology, here as elsewhere, masks an ocean of possibilities frozen into a few systems of convention.

Inside the software, it's all completely arbitrary. Such "technologies" as Email, Microsoft Windows and the World Wide Web were designed by people who thought those things were exactly what we needed. So-called "ICTs"-- "Information and Communication Technologies," like these-- did not drop from the skies or the brow of Zeus. Pay attention to the man behind the curtain! Today's electronic documents were explicitly designed according to technical traditions and tekkie mindset. People, not computers, are forcing hierarchy on us, and perhaps other properties you may not want.

Things could be very different.

I wish they were. Mr Nelson reminds us that we don't need to accept the conventions of computer systems design, web service design, or any design at all.

Computer technology provides us with ways of thinking that are limitless. There's not much of that around at the moment but maybe people just need to be reminded that they can.

BTW, the quote I was looking for was: "We live in media as fish live in water."

Here are is a video from his visit to Google in January 2007 and some links to start you off in a further exploration of Mr Nelson's work:

Transliterature, A Humanist Design

Ted Nelson home page

Doug Engelbart's Colloquium at Stanford | Session 9: Ted Nelson

An evening with Ted Nelson: visionary prerequisites for a vision - O'Reilly ONLamp Blog

Here is a Wired feature: The Curse of Xanadu

I just viewed an excellent video posted by Patrick Hinojosa. It is a TV news report from 1981 in which newscenter 4 describes a new project, involving the San Francisco Examiner and several other large newspapers, to enable online viewing of their news stories.

The newspapers published full page ads to encourage people to sign up for the experiment.

Only a few hundred signed up for the experiment in online newspapers probably because it took 2 hours to download a full newspaper and Compuserve charged $5 per hour.

David Cole, an editor at the SF Examiner is quoted saying: "We're not in it to make money . . . we probably not going to lose a lot, but we aren't going to make much either."

Prophetic words indeed! Unfortunately online news is costing the newspaper business a lot of money as it has been unable to monetize that service.

It's a Pandora's box that the newspaper business probably wishes it shouldn't have opened.

Here is the link to the 2.17 min video. I'm not sure if you have to be a member of Facebook to view it: http://tinyurl.com/dc3cn5

Elke Heiss pointed me to this: The Associated Press: Sarkozy offers new help for French print media

The French state will help provide free newspaper subscriptions to teenagers for their 18th birthdays, President Nicolas Sarkozy announced Friday. But the bigger gift is for France's ailing print media.

Sarkozy also announced a ninefold rise in the state's support for newspaper deliveries and a doubling of its annual print advertising outlay amid a swelling industry crisis.

Sarkozy argued in a speech to publishers that the measures are needed because the global financial crisis has compounded woes for a sector already suffering from falling ad revenues and subscriptions.

In a speech to industry leaders, Sarkozy said it was legitimate for the state to consider the print media's economic situation.

"It is indeed its responsibility ... to make sure an independent, free and pluralistic press exists," he said.

This is interesting news but I'm wondering why does it have to be print focused? Surely it shouldn't matter if the news is delivered via paper or electrons--the point is to support news organizations that are producing high quality media.

It's a shame that the free market cannot come up with a business model that distinguishes between low and high quality media. State intervention is welcome during tough times but it could be problematic if the state controls the viability of media (although the BBC is doing well).

OK, I am biased, because I see the world through a media lens, but I believe that the single most important challenge that faces this Internet economy is how to develop a viable business model that supports a professional media class that produces high quality media.

It is essential to society.

If we lose our New York Times, Wall Street Journal, Financial Times, BBC, etc, we lose our "fourth estate." We lose the people that that watch our politicians, business tycoons, and government policies. More importantly, we lose the people that investigate corruption, that check on the conduct of politicians, that know how to deal with spin.

An army of bloggers won't and can't replace our media professionals - the journalists, editors, producers, sub-editors, photographers, videographers, etc. Our media is the way we figure out solutions to important problems--and the better it is, the better we are.

Media is the way society thinks about important issues. If we have crap media we have crap solutions.

Software engineers have a phrase for this: Garbage in--Garbage out.

We are heading for a world of crap media. Buckle your belts.

This is my #1 tip if you plan to publish anything online, as text, images, audio, video, or any combination of content ...

Fortune magazine columnist Adam Lashinsky has a very interesting interview with GOOG CEO Eric Schmidt.

Google's business is very clearly making it very difficult for the newspaper industry to transition to an online business model because GOOG can sell advertising very cheaply, it doesn't have to employ legions of editors, journalists, photographers, etc, it uses servers and algorithms to publish content.

GOOG a new media company competing with old media in an online environment where it has by far the most efficient economic model. This is an issue I've been following very closely the past four years - the old media can't transition to the new media economy - "you can't get there from here."

The Fortune interview is set in the context of the dire straits for the newspaper industry:

Eric Schmidt wishes Google could save newspapers - Jan. 7, 2009

...the Christian Science Monitor eliminates its print edition, Tribune Co. declares bankruptcy, Detroit's two dailies slash home delivery to three days a week...

Mr Schmidt says there isn't much that Google can do to help the newspaper industry. He is asked if Google would purchase newspapers (it has enough cash to buy nearly all the publicly traded newspaper companies.)

Mr Schmidt replies:

The good news is we could purchase them. We have the cash. But I don't think our purchasing a newspaper would solve the business problems. It would help solidify the ownership structure, but it doesn't solve the underlying problem in the business.

That's certainly true - why buy a business that isn't viable?

What about a cash investment similar to Microsoft's investment in Apple, Mr Lashinsky asks?

There are no current plans to do that. The necessary criteria to get us to make that decision are not currently in place.

What about an investment from Google.org, the philanthropic organization?

We didn't want to co-mingle philanthropy with business. We are in the advertising business.

It should be pointed out that Google.org is a for-profit organization and expects to make profitable philanthropic investments. Again, the newspaper business is not profitable, so that rules that out.

The best Mr Schmidt can offer is to point to some fringe media projects:

What's an alternative way to support the public good? One is Pro Publica [the non-profit investigative journalism organization headed by former Wall Street Journal Managing Editor Paul Steiger and funded by, among others, the Sandler Foundation].

What if newspapers die?

To me this presents a real tragedy in the sense that journalism is a central part of democracy. And if it can't be funded because of these business problems, then that's a real loss in terms of voices and diversity. And I don't think bloggers make up the difference. The historic model of investigative journalists in any industry is something that is very fundamental. So the question is, what can you do about this? And a fair statement is, we're still looking for the right answer.

Foremski's Take:

Mr Schmidt is crying crocodile tears. There is a tremendous amount that Google could do today for the newspaper industry. Here are some suggestions:

-Pay for the use of newspaper stories in Google News. Monetize Google news and send the revenues to the news organizations so that they can reinvest the money and create a virtuous cycle. Sending traffic to newspaper sites is not good enough--the newspapers can't monetize the traffic to any real extent.

-Create subscription services for news products that can help news organizations monetize their work.

If Google is sincere in believing that news organizations perform a vital role in society and democracy then it should actively help find a way of supporting this extremely important resource. It has the brains, and it has the means, it just needs the will.

I don't see any sign that Mr Schmidt and Google has any desire to solve what is one of the most important issues on the Internet today: how to create a viable online business model for news organizations. Without this we face a dire future as a global society, imho.

- - -

Please see:

Google Is Really Bad At Monetizing Content Yet CEO Schmidt Lectures Newspapers

- FutureWatch: The End Of The News Aggregators And The Future Of News

GOOG Founders Could Buy All US Newspapers and Still Have $12bn

The Financial Crisis and its Impact on Journalism

- What Happens if the Old Media Dies Before the New Media Learns to Walk?

Shrinking Mass Media Masses At Googleplex

Silicon Valley = Media Valley: The MashUp of technology and Media

Google is a Media Company

Since leaving the Financial Times more than four years ago I've been able to observe the demise of the media industry from an excellent vantage point.

Coming from "old" world and then becoming an online publisher I quickly saw that the economics of the new media world would not be able to support mainstream media business models. There is no way that online advertising can pay for a professional media organization with its army of journalists, editors, sub-editors, production editors, photographers, administrators, etc.

The reason for the demise is because the cost of online advertising is far lower than for traditional advertising. The cost of online advertising set by biggest companies such as Google, Yahoo, Microsoft, etc. They place ads around other peoples content, or around their own content which is "harvested" from the Internet, or placed around their services such as search, and email. It is a highly automated system that produces content through computers and algorithms, rather than people.

However, If you are a traditional media company that produces its content using journalists, editors, sub-editors, photographers, etc, then you have a problem because online ad rates are not going to cover your operational costs. And as ad buyers have grown more comfortable with online advertising, and long term contracts began to expire, the move to online advertising has accelerated.

This has left media companies in a very tough spot. As their traditional sources of revenue have been disappearing their new sources of revenue are unable to cover their costs. And the current economic crisis is magnifying this trend to an ever greater degree.

The media death spiral has become steeper and faster...

This is a huge problem because as a society, we need media professionals -- citizen journalists cannot fill the breach.

We need journalists, editors, sub-editors, photographers, etc, to help maintain high quality standards, to prevent misinformation, and to counter the spin of corporations and governments. We need these vital services as a society, so that we can make decisions about important things, such as the economy, the environment, healthcare, education, war.

The quality of our decisions as a society is directly related to the quality of our information, to the quality of our media. Bad information leads to bad decisions. That's why figuring out a viable business model that can support professional media has become an extremely important issue.

Since online advertising revenues can only support companies such as Google and a host of others, that "create" their content with computers and algorithms, traditional media companies such as newspapers will have to move to a subscription model.

No future in free...

News is not free, and it is not a commodity. News has been made available for free, and it has been made into a commodity but that is not its future because there is no future in that model. You will have to pay for it.

That means the end of the news aggregators. That means the end to arguments that the news aggregators send high volumes of traffic to the online publishers. What is the use of more traffic when it cannot be monetized to support the work of the news organizations?

The only "news" that will remain free will be press releases--but there is little value in that type of unfiltered "news" source.

Monday evening I was at Google's holiday party for the media. It's one of my favorite events because I get to hang out with the Google comms teams and also catch up with my colleagues in the media. It's nice and relaxing.

But every year the number of press people attending gets smaller. The holiday party used to be held in a much larger space but moved to a smaller room a couple of years ago. At the rate the mass media is becoming micro-media Google can clean out a large broom closet and hold next year's party there.

It is extraordinary what is happening in the media industry, especially with the recent news of the Tribune bankruptcy filing and New York Times borrowing a quarter of a billion dollars.

I first spotted major trouble for the newspaper business when I left the Financial Times in mid 2004. I quickly saw that the economics of the online media business model would not be able to support the cost structure of newspaper companies.

Online revenues would not be able to support newspaper companies with all their legacy costs, pension plans, office buildings, trucks, printing presses, layers of admin, journalists, editors, sub-editors, web masters, IT departments, HR, security, lawyers, ad sales people, etc. I could see that there was no way that online publishing would generate enough money to support media businesses with such large costs of operation.

I started writing posts around the theme "you can't get there from here." It's a wonderful Yankee expression that makes perfect sense when applied to the established media industry.

There is no way that the media industry can transition to the online world without totally reinventing itself. And that will happen too slowly. That's why new media companies are better positioned, such as the Huffington Post, because they are built from the ground up on the current economics of the online publishing market. It's never easy to cut back to grow. It's always easier if you are what I call a "new rules enterprise," you don't have legacy thinking and a legacy cost structure to deal with.

So what do we do? We need professional journalists to sort out the information we need as a society, otherwise we are headed for a damaging period of disinformation.

Media is how society thinks, it is how we collectively decide on important issues. Without a professional media class we are left with an army of citizen journalists who don't have the same access, don't have the same experience dealing with information "spin," and who don't have to get up every day and be professional journalists.

Creating a business model to be able to pay for the professional journalism we need is a number one priority for our society, it is even more important than sorting out the current financial crisis, IMHO.

Stork to visit the Kranes . . .

Anyway, it was good to catch up with people at the Googleplex. The Google comms team is a little upset at being called arrogant by some sectors of the media but that's not news. The only Google person that I saw looking down at most of the media in room was Brian O'Shaughnessy, but that's because he's 6'6" :-)

I found out the stork is making a third delivery at the David Krane household very soon (congrats!). And I also met the new head of Google communications and public affairs, a British lady, Rachel Whetstone. She used to work in London running Google's European communications team, she is also the former political secretary to Michael Howard, a senior British politician.

I googled Michael Howard and found this on the Daily Telegraph site:

Convicted drug dealer 'bribed former Home Secretary Michael Howard for early release'

A convicted drug dealer claimed that he bribed former Home Secretary Michael Howard £400,000 to get an early release from prison, a court has heard.

By Caroline Gammell

Last Updated: 8:32PM GMT 31 Oct 2008

Working at Google should be a lot less problematic than working with British politicians and the skeletons in their closets...

Marshall Kirkpatrick has been working for the last three months on a new publishing project that launches Tuesday morning - ReadWriteWeb Jobwire.

Marshall told me about this project when we were in Japan together at the end of May as guests of collaborative software company Lunarr.

RWW Jobwire consists of stories about new senior hires at a variety of companies. There are a lot of press releases announcing senior exec appointments but they are rarely covered by current media publications. RWW can quickly become the lead media brand for these types of stories. Even in a down economy people still get hired.

Jason Calacanis, the founder of Mahalo, a "human powered search site" has cut ten percent of his staff in response to market conditions "much worse than I thought."

However, ten percent staff cuts seems like the normal culling that takes place in Silicon Valley companies...

Mr Calacanis writes in an email newsletter that part of the cost savings will be achieved by having his writers work from home. He says this is where writers like to work in their pajamas:

One thing I've learned two or three times now is that writers, in large part, like to work from home in their pajamas with a big cup of coffee and their loved ones by their side. I know this to be true because most of my e-mails to you guys come when I'm sitting in the garden with my laptop, a cup of joe, and Taurus and Fondue curled up at my feet.

Mr Calacanis has had prior success with Silicon Alley Reporter and Weblogs, Inc.

Nick Denton at Gawker moved very quickly to make his cuts. I wonder if there will be any staff cuts at newer media companies such as GigaOm, TechCrunch, ReadWriteWeb, or VentureBeat?

Foremski's Take: Bloomberg and Thomson Reuters (NYSE: TRI) are directly impacted by the financial crisis. Their journalists are part of the real-time financial information systems that are sold to traders and analysts on Wall Street and elsewhere.

It is not known yet how many seats for the Bloomberg and Thomson Reuters terminals have been lost as a result of the financial crisis but they must be substantial.

Bloomberg's web site reports:

. . . more than 2,300 reporters and editors in 135 bureaus, Bloomberg News publishes more than 5,000 stories on an average day syndicating to over 400 newspapers worldwide, with a combined circulation of 73 million people.

Thomson Reuters has already been cutting journalist jobs as a result of its merger earlier this year. In May it said it wanted to cut 140 editorial jobs out of about 2400. Reuters Media Solutions:

Over 2,400 seasoned Reuters journalists report from 196 bureaus across the globe, bringing you fast, accurate, objective and comprehensive coverage of important international and domestic news in multiple languages.

The impact of the financial crisis on the two organizations is certain to lead to cost cuts in editorial, especially since the editorial side of the business was subsidized by the financial services side of the business.

The financial crisis is just the latest blow to journalism. Analysts have painted a bleak picture for ad supported newspaper and television companies in 2009.

The UK Guardian reports:

'Horror show' year ahead for media firms

The worsening state of the global economy will make 2009 a "horror show" for advertising-dependent newspaper and television companies, with some analysts predicting that businesses may have to wait until 2011 to see positive ad growth.

Valleywag reports that entire US newspaper business is valued at $20 billion. Sergey Brin and Larry Page are worth about $16 billion each.

Foremski's Take: US newspapers didn't realize GOOG is a media company until it was too late. Google was able to scrape its content virtually for free, from newspapers and other web sites, and sell advertising around that content. Newspapers spend huge amounts of money to create their content.

Newspapers, and other media companies, have allowed Google to commoditize content, and retain the value in the aggregation and distribution.

Yet the technology for aggregation and distribution is a commodity -- content is not a commodity.

Once the content creators and owners realize that simple fact, then we might have a turnaround in the media sector. If not, then the media sector is next for a bailout--it is too important to fail.

For nearly four years I've been warning about huge changes in the media world and why the old media can't make it into the new media world.

There is an American expression that I love to use: "You can't get there from here." It seemingly doesn't make sense but it makes perfect sense in this context.

You can't get there from here. When I left the Financial Times four years ago to become the first journalist to leave a top newspaper job to become a "journalist blogger" I could see the economic model of the old world, and the new economics of new media.

I could see that pageviews and clicks could barely support me--a chap with a laptop and a cell phone. How could the economics of the new world support the legacy cost structure of the old, with its office buildings, printing presses, pension plans, etc?

I could also see that the transition of the media's business model would be tremendously disruptive. And that this disruption would accelerate over the the next few years, as indeed has happened.

I asked then, and I ask now: What happens if the old media dies before the new media learns to walk?

What will happen to journalism and to the hundreds of years of best practices created since newspapers were born from Guthenberg's moveable type machine, if old media can't transition to the online Movable Type of the new media world?

And it won't be able to transition. Because the economics of new media -- pageviews and clicks -- can't support it.

New media is defined by a machine-based economic model. It is cheaper to plug in a bank of servers and run software to publish content than it is to hire editors, manage journalists, and carry all the other employee related expenses of healthcare, pensions, offices, etc.

Google is machine-based media. It uses servers and software to harvest and publish content and then sell advertising around it.

Google and other machine-based media companies such as Yahoo, AOL, etc can cover their costs by selling ads cheaply. And that's what sets the price of online advertising--machine-based media companies.

Media companies that require people to generate their content can't compete. Their costs are far higher than machine-based media companies--yet they have to sell their online advertising at the same rates.

That's why "You can't get there from here."

What happens if the old media dies before the new media learns to walk?

It won't be pretty. It'll be ugly and we'll have to relearn our best practices. And there will be considerable damage done to society.

But it is not just media companies that are at the center of this disruptive tempest. Many new startup companies are in the cross hairs too.

(Continues here...)

I'm a big fan of Techmeme, the news aggregator run by Gabe Rivera. Gabe has been following old and new media for several years and has created an algorithm that does a great job in filtering up the top stories of the day in the mediasphere. Instead of using customized RSS news aggregators, many people in the tech industry use Techmeme to guide their daily news reading.

I ran into Gabe last week at an event at the St. Regis in San Francisco and asked him about the state of the blogosphere. I pointed out that there seem to be few "real" bloggers left. Original bloggers such as GigaOm, ReadWriteWeb, TechCrunch, etc now all seem to be just online news sites and they read like an "old media" news site.

Gabe agreed, he said:"Techcrunch and the others used to link to each other and now they don't--they only link if they have to."

That's very much like the old media, which hated to link or give credit to any rival news organization. I remember at the Financial Times, we would always try to "stand up" a story ourselves based on our contacts and would only give credit where credit was due when we couldn't write the story based on our information.

Gabe said that in this way, new media sites were very much acting like old media. And with fewer links, that means he has had to continually tweak his algorithm. "I get around the problem by looking in many places for links or references to news stories, in places you might not normally look."

Gabe is very secretive about how his algorithm does the filtering because he doesn't want others gaming his system. A story on Techmeme can generate a lot of traffic for a news site.

He says that there are new bloggers coming online and they have audiences as large as the A-list bloggers had in 2005, and they do link to each other. They tend to be in specialist software engineering circles. But that's where blogging first grew to prominence, amongst the software engineers.

Maybe blogging, that highly personal style of news delivery, is coming back to its roots. I'm thinking of starting a blog...

Innovation journalism is a concept that has been popularized by David Nordfors, who leads the Innovation Journalism program at Stanford university. The subject just received a big boost from the Finnish Funding Agency for Technology and Innovation with the award of a 900,000 euro ($1.31 million) research grant to a Finnish research consortium that will work with the innovation journalism program at Stanford.

If you have about a minute, here is David Nordfors explaining, "What is innovation journalism?"

More details from David Nordfors: The Innovation Journalism Blog: Finnish Innovation Journalism Research Gets 900.000 Euro

The main aim of the new research project (acronym as Ginjo) is to enlarge and deeper the knowledge of global innovation journalism, and also develop new working methods and tools for news media. Case studies will concentrate on topics such as “green tech” and eldercare innovations.

PR is such sensitive profession. Anytime anyone criticizes any aspect of the practice of public relations the industry pays lots of attention along with a lot of mea culpa. If journalists did the same we'd never get any work done.

Jennifer Leggio over at ZDNet has a good account of the latest PR bashing incident: Bloggers vs. PR - the broken record continues to skip | Feeds | ZDNet.com

It seems to me that the PR industry takes on criticism in two ways:

1 - it agrees with the criticism and pledges to do better accompanied by donning of hair shirts and self-flailing blog posts that go on and on for pages.

2 - It dismisses the criticism as massively ill informed and the ravings of an idiot..

It is usually 90 per cent number 1.

Whenever I come across such behavior in a friend I know that something is up, that there is a self-esteem issue at work, maybe, and that there must be something deeper going on. . .

The deeper stuff is that things have changed in the PR industry, and they've changed forever. Yet sometimes things look the same as before. And that can be a confusing time.

Some of my friends in the PR industry get upset with me for saying that things have changed. But my saying that things have changed didn't cause it, I'm just saying what I see.

It is similar to when I became a journalist "blogger" 4 years ago. My friends at the Wall Street Journal, San Jose Mercury News, SF Chronicle, Forbes, Fortune, Reuters, AP, etc would sometimes shoot me cold looks as if, as a "blogger," I was responsible for making their lives a misery, because they now have work longer hours, and live under the threat of job cuts, and they can't go home at 5pm every day, anymore.

The trends in media have nothing to do with me, I'm swept up in the dynamics of this industry the same way as everyone else--I'm trying to deal with the disruption.

What I understood four years ago was: the business model for media had changed forever and it wouldn't return to the old ways, and that is the future for PR too.

The same forces that are dramatically changing, and remaking the media industry, will do the same for the PR industry. Yet that change isn't very visible yet, it is masked. This is because PR is making money with traditional services plus making money selling "new media/social media" services, these are boom times for PR. Change only happens when it hurts to do things the old way, that's why the media industry is changing.

It sometimes seems as if the PR industry is Wiley Coyote chasing the Roadrunner--all is well as long as no one looks down and notices the road has gone, and there is nothing there but gravity and a distant canyon floor.

- - -

Please see:

Chris Anderson's PR Blacklist Backlash - The Long Tail of Bad PR

Raining on the PR industry's parade...

I spent part of my afternoon catching up with advertising network of ad networks, Adify, which was sold to Cox earlier this year for $300m. That was a super smart move for Cox and it gives Adify a large media company as a partner that can leverage its technology across borders and across industries.

Adify has a great front-end for controlling and placing ad inventory by advertisers and publishers. And what isn't appreciated, a great back-end for handling invoices, 1099s and all the other daily paperwork and reports that needs to be dealt with.

Adify enables publishers to run their own vertical ad networks and to recruit other sites to their ad network, and it takes a cut of the ad revenue. This year it is on target to move as much as $80m in ads, next year it plans to double that number.

I met with Russ Fradin, president and Joelle Gropper Kaufman, VP marketing. Most of my questions were on the trends in online advertising--a key interest of mine since I'm an online publisher but also because of my interest in what will be the new business models for online content.

Here are some key notes from our conversation:

- If you are doing brand advertising, large ads are more effective than small ones even though focus groups say people prefer small ads. It's about creating an immersive experience.

- There is a shortage of quality content. Ad prices are good for sites or ad networks that offer quality content.

- Personalization of advertising on the web isn't happening. Ad agencies want to make large buys. I pointed out that an ad agency might buy a 20m page view site but it really just needs to reach 10,000 people in that 20m. Why not make buys that target that 10,000 people? If ad agencies were to do that, it might mean dealing with dozens of seperate buys and dealing with dozens of invoices and reports and other paperwork. That won't happen. Personalization in any form isn't happening, ad agencies are still buying broad demographic profiles. It will never happen, ad personalization is a myth that has been talked about since the mid-1990s and it continues to be unrealistic.

- Social networks are offering low quality ad inventory and there is a lot of it out there. It is cheap because people are doing things rather than consuming content, they aren't interested or paying attention to the ads. Adify believes that this will always be the case, Facebook, MySpace etc will continue to offer huge amounts of low quality advertising inventory.

Adify says it has signed up 40 new networks in the past quarter and will soon announce its first overseas deal.

- - -

Please see:

News Analysis: Cox Acquires Adify For $300m Cash - Will Others Follow?

The future battle between ad networks and publishers… | Tom Foremski: IMHO | ZDNet.com

The recent New York Times article "Is Google a Media Company?" reports on Google's recent launch of Knol, a Wikipedia-like service launched last month.

While Knol is only three weeks old and still relatively obscure, it has already rekindled fears among some media companies that Google is increasingly becoming a competitor. They foresee Google’s becoming a powerful rival that not only owns a growing number of content properties, including YouTube, the top online video site, and Blogger, a leading blogging service, but also holds the keys to directing users around the Web.

“If in fact a Google property is taking money away from Google’s partners, that is a real problem,” said Wenda Harris Millard, the co-chief executive of Martha Stewart Living Omnimedia.

A Google spokesperson, Gabriel Stricker says, "We are not interested in owning or creating content." This is a strange statement to make since the article points out that Google owns YouTube and much more.

Foremski's Take:

For the past four years I've been saying that Google, Yahoo and many other large Internet companies such as AOL, and eBay are media companies. They publish pages of content with advertising around it.

The fact of owning or not owning the content is a red herring. Either way, Google publishes pages of content with advertising around it. How is that not a media company?

GOOG is not a technology company. What technology can you buy from Google? I can buy a database from Oracle--that's a technology company. I can buy microprocessors from Intel--that's a technology company. What technology can you buy from Google?

Google is a technology-enabled media company. It won't create its own content. It mostly scrapes its content from the Internet, or collects it from users of Youtube, etc, and sells advertising around it. How it gets its content is not important, it is still a media company.

Why does Google insist it isn't a media company? Because large media companies such as the New York Times outsource a large part of their online advertising to Google.

Would the New York Times outsource its advertising to another media company such as Tribune or Gannett? Certainly not.

But Google can get away with it provided it is not viewed as a media company but as a technology company.

Again, I'll ask, what technology can you buy from Google? Google publishes pages of content with advertising around it. How is that not a media company?

Earlier this week the Churchill Club hosted a very interesting panel in San Francisco with some of the most successful producers of webisodes — episodic online videos.

Webisodes are the best way to attract sponsors and advertisers for video content rather than one-off content. The panelists gave out lots of great tips on how to integrate brands into video content, the length of videos, and some do's and don'ts.

Brent Friedman also talked about the Gemini Division, one of the most ambitious webisode projects created so far.

The panelists left to right:

Nathan Coyle, Co-head, Digital, Creative Artists Agency Brent Friedman, Executive Producer and Head Writer, Electric Farm Entertainment/Gemini Division Jordan Hoffner, Head of Content Partnerships, YouTube Ziv Navoth, VP of Marketing and Business Development, Bebo - Moderator: Frank Rose (not in photo).

Here is an 8 minute extract talking about brands and how to, and how not to, integrate them into webisodes.

Here is the full one hour version of the talk — it's packed with great content.

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Hat tip to Adam Zand: Utterz - AdamZand's Discussion

The Securities and Exchange Commission (SEC) posted a transcript of a speech in which it recommended "that the Commission issue an interpretive release to provide additional guidance and greater certainty on how companies can use their web sites to provide information to investors in compliance with the federal securities laws..."

Four main topics will be addressed:

• When information posted on a company web site is “public” for purposes of the applicability of Regulation FD;

• Company liability for information on company web sites – including previously posted information, third-party hyperlinks, summary information and the content of interactive web sites;

• The types of controls and procedures advisable with respect to such information; and

• The format of information presented on a company web site, with the focus on readability, not printability.

Adam Zand speculates that press releases distributed through wire services might not be required. He says that the SEC's "interpretive release" probably won't be available for about a week or more.

Demise of Wire services? SEC on Web disclosure

Please see the full text of the SEC speech at the end of this post.

Foremski's Take:

If a company's web site is RSS enabled and it releases financial information and any other material information through that web site, that should satisfy FD requirements. This is because financial analysts and investors can opt-in and subscribe to that information through RSS news readers, or choose to have that information emailed as soon as it is published.

This form of distribution is much broader than through a wire service such as BusinessWire or PRNewswire. Distribution through RSS and email takes advantage of the full breadth of the Internet and does not require an intermediary such as a wire service. Yahoo Finance and Google News would provide additional free distribution services in those cases where investors are not subscribed to a company's financial information.

Companies will be able to save considerable amounts of money in bypassing those wire services, where a single release can cost at least $1200 and often more.

The SEC might mandate a transition period in which RSS and email distribution runs in parallel with wire service distribution.

For many years wire services have made considerable revenues from carrying FD information because companies were scared that they might face SEC penalties if they didn't disclose material information in the right manner. FD has suffered from not having clear rules around what is considered best practices.

The SEC appears ready to change or more clearly define those rules to reflect the broad distribution offered by the Internet and a company's web sites.

- - -

It's interesting that the SEC wants company web sites to focus on "readability, not printability." This speech is anything but readable:

One of the best panels at the recent Fortune Brainstorm conference was the "Blogger Showdown" panel at the Monday evening dinner. Adam Lashinsky does a great job moderating the panel. This is the only video of the panel.

On stage is Robert Scoble, Kara Swisher and Om Malik. The panel soon gets off to a raucaus start.

Hear Kara saying that she's loving being a Rupert Murdoch employee!

Hear Om repeating my mantra that Silicon Valley has turned into media valley!

Hear Robert Scoble saying how his mistakes are fixed by his readers!

Hear Adam Lashinsky say how Fortune avoids mistakes by getting it right the first time!

See Fortune report the "Blogger Showdown" and issue a correction!

- - -

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I'm at Fortune's exclusive invite-only Brainstorm conference in Half Moon Bay, California. The content of the panels is really dull . On the breaks everyone is complaining about it. There is little involvement from the audience (except Vint Cerf!) and the moderators talk way too much.

All the action is off-podium. I've been chatting with Vint Cerf, Michael Capellas, Jeff Bezos, Sophie Vanderbroek and many other tech luminaries. Also, Richard Edelman, Frank Glass, Ross Mayfield, Matthew Greeley, and other local entrepreneurs.

The corridors are much more fun than the deadly dull monologist moderators. Maybe the afternoon sessions will improve.

UPDATE: Fortunately the afternoon sessions have improved -- I'll be reporting on some of the sessions later.

I popped over to the start of Fortune's Brainstorm conference primarily because they said Sir Martin Sorrell, who I consider to be one of the world's savviest media executives along with Rupert Murdoch, would be there.

Unfortunately, Sir Martin couldn't make it because he is engaged in a multi-billion acquisition. Too bad, this is someone worth watching. Check out Reuter's Eric Auchard's interview with Sir Martin. I love the end part when Sir Martin tells Eric "good luck with your merger." He was reffering to Thomson Financial's acquisition of Reuters, which had just closed a few weeks before.

Eric says, "it's over, we are the survivors."

Sir Martin says: "Sorry. It’s not done, it’s just starting. The easiest thing is to do the deal. The most difficult thing is to make it work."

It's a great interview and I love that Eric left that quote in there, both are class acts.

Please see full interview: Summit Notebook » Blog Archive » Q&A with WPP’s Sir Martin Sorrell | Blogs | Reuters.com

Despite my disappointment the left over pickings weren't that bad...

Coming up on SVW:

Vint Cerf on Internet Neutrality . . .

I got a fantastic interview with Vint Cerf, father of the Internet and chief Internet evangelist for Google. Coming up: Vint Cerf tells me how he was misquoted over net neutrality in full page ads on WSJ and elsewhere! He talks about how the government needs to stop the Telcos from controlling access to the Internet.

First Data wants to be first in consumer data . . .

I also got a great interview with Michael Capellas, co-founder of Compaq Computer, former head of Worldcom and now chairman and CEO of First Data. Mr Capellas tells me about First Data's plans to become a consumer data powerhouse. He says "Right now data is just ten percent of our business I want it to be 50 percent within two years."

It's a Media Valley...

I have exclusive footage of the "Blogger showdown" with Robert Scoble, Kara Swisher, and Om Malik. It was difficult to get Kara to shut up but Om got a few words in edgewise and I'm glad that he did because he seems to be an avid reader of Silicon Valley Watcher because he repeated my line of "Silicon Valley is now a Media Valley."

I've been saying that for nearly four years. I was on the front cover of Nikkei Magazine last year on this topic, Japan's top business magazine. And I had a Japanese TV crew in my living room earlier this year interviewing me on this topic.

In fact, just Google "Media Valley" and see who pops up?

Here is my first mention of how the center of the media industry is moving to SIlicon Valley in September 2005.

I hate blowing my own horn it's better if someone else does it, but...

Unfortunately, his Omness didn't give me any credit for media valley :-( But maybe he would have if Kara would shut up for a bit :-)

Video of the "blogger showdown" is coming...

Behind the Scenes: Japanese TV Crew First Stop In Silicon Valley (Media Valley...)

Why Silicon Valley is Media Valley: And Why Japan Is Interested...

Silicon Valley = Media Valley: The MashUp of technology and Media

Silicon Valley has become Media Valley - someone should tell NYC

Twitter...

I was Twitting like a maniac during the conference despite not Twitting much at all the last week or so. My view is that you shouldn't Twit unless there is something to say.

Do I need to know that Loic is having another beer? That really is a Twit of a Tweet imho. Keep it real, don't take up bandwidth with crap like that...

Media not allowed in to eat...

There was a bunch of disaffected journalists/bloggers that were banned from the dinner at the Fortune Brainstorm. I won't name them but they are huge in their sectors.

They vowed not to come back the next day and wondered how I got one of the main (eating) badges. I couldn't answer that question, you'd better ask David Kirkpatrick, he invited me.

I was late strolling over to the dinner and had to pass by the disgruntled media pack who clearly had been sharing bile about the organizers, (and their blood sugar was very low), and said "Hey, I'll see you over at the dinner!" A howl arose of curses and laughter...

I think some of them got in in the end :-)

- - -

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I'm a big fan of Pat Phelan, one of Ireland's top entrepenuers and also one of Ireland's top read bloggers. Pat just set a cat among the pigeons in one of his latest posts: Flixwagon pay bloggers, non disclosure from bloggers or Flixwagon

Pat is of the opinion that blogging will be harmed if bloggers don't disclose who pays them to post. I agree (my money currently comes only from Intel.)

I do agree with most of Pat's post but not about this:

If you receive one cent you must disclose you must go public otherwise we are all tarred with the same brush.

I don't think anyone can be influenced with one cent.

How about drinks, how about a meal? I often disclose in my posts that I just had lunch or dinner with a company. I get T-shirts, and backpacks, and pens, and I almost always leave them on a street corner near my apartment or use the T-shirt to wash my car. I don't think a single one of my reader's will be judging my coverage by how clean my car is from the use of those T-shirts.

Companies cannot buy me with lunch, it would take far more than that, and then I would disclose it anyway.

Should readers of newspapers and magazines be informed about every tsotchke or meal anyone receives? I see journalists from Fortune, Forbes, WSJ, Businessweek, San Jose Mercury, San Francisco Chronicle etc, all the time, drinking and eating and carting off backpacks filled with pens and T-shirts. Should they be disclosing all of that?

I've written about Pat's company before, and he bought me several drinks. That wasn't why I wrote about Pat's Cubic Telecom. Please see: The Man Who Broke the Telco Cartel . . . and Bridged the Global "Voice Divide"

I often meet with companies and there are usually drinks and meals involved and yet I don't write about them. I only write about companies if I feel there is something to say. It's about the content of conversations and the meeting not how good the dinner was.

A year ago I was at one media roundtable at a posh restaurant with top journalists from leading publications and one of the top VCs at the table didn't like where the conversation was going and he stopped everybody and said "Let's get back to discussing XXX I believe the journalists are getting their dinner for free."

I was livid, I reached into my pocket and was ready to throw my money onto the table and walk out before being stopped by a colleague at CNET. I don't go to evening events for meals or drinks, I can eat and drink at home, and often in much better company.

I and other journalists turn up to evening events for the content, for the potential story that can come out of such events. It is insulting to think that we turn up for food and drinks.

I think payments should be disclosed and that bloggers should disclose every tsotchke and meal they receive only if they feel they were influenced by that gift. Otherwise just disclose the payments.

Take a look at Pat's post and see if you agree: Flixwagon pay bloggers, non disclosure from bloggers or Flixwagon

- - -

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I'm a huge fan of Sam Whitmore and his Media Survey. Sam watches the media and spots all the early trends. I ran into Sam outside the Rockit Room Wednesday evening and just happened to have my video camera with me.

It was a fun and illuminating 8 minute chat, despite the low light. This time I'm interviewing Sam rather than the other way around. We discuss how traditional media is adapting to the new publishing technologies, and also Jason Calacanis' retirement from the blogging life.

[Many thanks to Christy Whitmore for the great camera work.]

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Kara Swisher got a great scoop last week with Guardian Media's $30m acquisition of PaidContent and now says that TechCrunch has been in talks with Time Warner's AOL.

So far Mike Arrington, the founder and major shareholder, has turned down $20m to $30m according to Ms Swisher's sources.

However, she says that a deal with AOL makes sense:

AOL would probably be a good home for a site like TechCrunch, since it has a blog focus from its own Switched site and sites it bought, like Engadget.

AOL acquired that popular gadget site in 2005 in the $25 million acquisition of Weblogs, which was founded by entrepreneur Jason Calacanis.

Calacanis, by the way, runs an annual tech conference with TechCrunch, now called TechCrunch50.

PaidContent’s Rafat Ali Speaks! So, Here’s Who’s Next… | Kara Swisher | BoomTown | AllThingsD

Foremski's Take:

The valuation of TechCrunch is not comparable with that of Weblogs or PaidContent. TechCrunch should be valued at a much higher level especially compared with the extremely generous Weblogs valuation.

But should Mike Arrington take the money and run anyway? Valuations of online news sites appear to be trending downwards. Weblogs valuation was very very good, PaidContent, which has much higher revenues than Weblogs had, has a comparably poorer valuation.

There are signs that revenues for online news sites are under pressure. Gawker Media, for example, recently cut pay rates for its writers. [Gawker Media cuts payrates… Again! : The Blog Herald]

Also, Mike Arrington has spoken about plans for TechCrunch to be the acquirer of other online news sites and to take on CBS's CNET. Taking $30m and becoming part of AOL would be anathema for Mr Arrington, even if the deal were sweetened.

On another note, it's a shame that Kara Swisher and colleague Walt Mossberg didn't have the courage to strike out on their own with AllThingsD.com. They have built up an excellent site but it is wholly owned by Dow Jones, publisher of the Wall Street Journal.

Maybe, AOL would have been bidding $20m to $30m for AllThingsD by now, instead of TechCrunch.

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[Wrapping up the week in three dots . . .]

Kara versus Walt . . .

Coming up at the DEMOFall conference in San Diego September 7-9:

Special Session: Walt and Kara: Head-to-Head

As the hosts of The Wall Street Journal's esteemed D Conference, Walt Mossberg and Kara Swisher have challenged the leaders of the digital world with tough questions and probing interviews. Their toughest interview isn't with Steve Jobs or Bill Gates, though. It's with each other. The Dynamic Duo of All Things Digital debate each other on their blog, AllThingsD.com, and now live on the DEMOfall stage. What lies ahead for the Digital Age? Walt and Kara go Head-to-Head.

[Here is Kara telling hilarious stories about Walt at SDForum Visionary Awards:]

http://video.google.com/videoplay?docid=6812621760915098674&hl=en

Euro Entrepreneurial Domination . . .

Wellington Partners, the $1.2bn European VC firm threw a party to mark the launch of their Palo Alto office. It was a stellar setting, the "cube" of the new Jewish history museum n San Francisco, and a stellar crowd of top journalists and bloggers. One of the Wellington partners made a speech about how Wellington was going to help Euro domination in the entrepreneurial field.

I spoke with one of the partners after the party as we were kicking around a soccer ball (one of the tchotchkies) outside. I said Euopean based entrepreneurs could be counted on . . . "the fingers of one hand," he finished my sentence with a laugh. Europe is not known as a hot bed of entrpreneurism. There are far, far more European entrepreneurs over here than over there.

Wellington Partners opens Silicon Valley office ...

SNCR Call for 2008 New Comm Awards . . .

I'm proud to be a founding member of the Society for New Communications Research (SNCR) think tank, created by Jen McClure and based in Palo Alto. SNCR has put out a call for entries for the 2008 Excellence in New Communications Awards.

These prestigious awards honor corporations, governmental and nonprofit organizations, educational institutions, media outlets, and individuals who are innovating the use of social media, ICT, mobile media, online communities and virtual worlds and collaborative technologies in the areas of business, media, and professional communications, including advertising, marketing, public relations and corporate communications, as well as entertainment, education, politics, and social initiatives.

Events . . .

Tech Women at the Churchill Club July 15

The event, moderated by Ann Winblad of Hummer Winblad Venture Partners, will feature the inspiring stories of four women technology leaders, the critical factors in their success and how have they overcame the obstacles of the fast-paced tech industry that is often considered to be dominated by men: Gina Bianchini, CEO of hot tech start-up Ning; Charlene Li, principal analyst at Forrester Research; Teresa Takai, CIO of the State of California, the 10th-largest economy in the world

http://www.churchillclub.org/eventDetail.jsp?EVT_ID=777

AlwaysON Stanford Summit July 22-24.

The AlwaysOn & STVP Summit at Stanford is a two-and-a-half-day executive gathering that highlights the significant economic, political and commercial trends disrupting the global technology industries.

Weekend Watcher:

San Francisco's premiere jazz composer and performer Marcus Shelby plays a free concert in San Francisco at the Yerba Buena Gardens Saturday July 12 at 1pm.

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The UK newspaper group Guardian Media paid $30 million for PaidContent, a media company founded by Rafat Ali and which publishes a popular newsletter and web site covering the media industry.

The Guardian newspaper is one of the top UK newspapers famous for its left of center position. It is also well known for its extensive coverage of the media industry, making it a good fit for the acqusition of PaidContent.

The Guardian has also been one of the leaders in using new media technologies such as RSS.

Will European Euros be used to buy more US media properties?

WSJ's Boomtown:

Guardian Media Group Buys paidContent for $30 Million

PaidContent:

ContentNext 2.0: Life With The Guardian Media Group

ReadWriteWeb:

Confirmed: PaidContent Bought By the Guardian - Here's How Media History is Made

GigaOM:

Why Guardian Media Bought paidContent for $30M - GigaOM

It was very good to see my very good friend Om Malik Tuesday evening at a reception for his Infrastructure '08 conference. Om recently launched Om 2.0 a slimmer and healthier Om. And an Om that is 50 lbs lighter than the prior version.

I said, "Surely that is Om 1.5?"

Om said "less is more." So let's call it Om 2.5 :-)

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Linking and quoting content from web sites is what makes the world wide web into a true web. It's a fantastic media technology that can publish content and distribute it to almost anywhere in the world in seconds.

Associated Press recently took steps to limit the web by preventing unlicensed sites from quoting from its news stories. This is a bad policy because it is restrictive and it lessens the value of the web, and in my view, it is uneccessary.

Fair use frustration . . .

AP's policy is born out of the general frustration felt by the media and other content creators when their content is used by others for profit or for publicity--and the content creator doesn't share in the value reaped by others.

Those that take large chunks of content from AP or from other sites under undefined fair use policies say that they are driving traffic to the source site. But anyone that has access to their server logs knows this is only slightly true. The problem is that only a small fraction of traffic goes to the source site. And only a small percentage of that traffic can be monetised by the source site.

So that means content creators, if they produce something of value that is widely quoted and distributed, are unable to benefit much from the value they create for others that use or reference that content.

Clearly, that's not fair use, because creating news content for example, is expensive. You need journalists, editors, pension plans, offices, administrators, and janitors... Google News and other news aggregators machines to harvest that content - that's a low cost of content--all harvested as "fair use."

Bloggers and others, do pretty much the same: they take and quote freely from content such as news stories and they benefit from that content--they create a personal brand and following that helps them in their day job-- they profit from it. But the content creators don't get to benefit from the value that is created by those that use or reference that content.

Meritorious support . . .

It doesn't have to be that way. And we don't have to lock up content and make the web less useful, as AP appears to be doing. There is potentially another way in which content can be created and distributed freely and which would support content creators to create more content.

My proposal is a voluntary system in which you quote freely from a site and you republish an "adtribution link" next to it that would help support the source site. An adtribution link would be a simple text link ad set by the source site. This would meritorious support because only good content gets quoted and the bad doesn't.

The adtribution link could be identified this way:

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The "Support the source" identifies the adtribution link that could be in green to signify its link to money.

If you quote from a page with an adtribution link you would copy and paste the entire link, including "Support the source" which identifies and links to the source site. It shows that you are respectful of the work of others and it also allows you to support your favorite sites without it costing you anything.

In this way good content gets the distribution it deserves, and so does the adtribution link that helps support that content.

It is a win-win situation. It doesn't cost anything to "support the source." And it would help great content producers create more great content -- creating a virtuous circle.

Would you support the source? How often do you get the chance to be among the first :-)

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[Please copy and paste the following link:]

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Associated Press caused a blogostorm when it instituted a "fair use" policy that was anything but fair. I disagree with that policy but I do understand the frustration of being a media professional/blogger and recovering some of the value of my work. Most bloggers have a day job but I don't and it is tough to make a living doing what I love to do.

I spend a lot of time out and about, interviewing people, going to events, and writing. It is expensive living in San Francisco and carrying the expenses of travel and publishing. My sponsors are able to support part of my work but it doesn't cover all my costs, it would be great to recover some of the value of my work.

I'm always happy when others quote my work and I have no AP-like restrictions on how much you can quote. In fact, I allow full text commercial use of my work as long as all the links are kept intact and attribution is given. If you can make money with my work then go ahead.

However, if you do find my work useful and want to quote it, it would be great if you could carry one of my text ad links. That way if my work gets wide distribution some of that value might come back to me and/or my sponsors.

More and more blogs are now professional media companies, such as GigaOM, ReadWriteWeb, VentureBeat, All Things D, And I know there are many other professional bloggers out there that would love to share in the value that their work produces.

If they produce breaking news etc, and are widely quoted, wouldn't it be great to support their work by also giving something back? Especially if you could support that work without it costing you anything.

For example, if you quote from this post, maybe you could also carry this text- ad link next to it which has my Amazon ID embedded in it: Order the amazing Amazon Kindle Electronic Book Reader - find out why people are raving about it.

Maybe this type of link could be called a supporting link, or an adtribution link?

You don't have to carry the adtribution link but it would be seen as respectful if you did, and it would help to support the media source. Maybe if AP adopted such a system it might not seem to be so mean and ridiculous.

What do you think?

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Adtribution link: Order the amazing Amazon Kindle Electronic Book Reader - find out why people are raving about it.

Adtribution link source code just copy and embed in your post:

<a href="http://www.siliconvalleywatcher.com/">Adtribution</a> link: <a href="http://www.amazon.com/gp/redirect.html?ie=UTF8&amp;location=http%3A%2F%2Fwww.amazon.com%2Fgp%2Fproduct%2FB000FI73MA%3Fpf%5Frd%5Fm%3DATVPDKIKX0DER%26pf%5Frd%5Fs%3Dcenter-1%26pf%5Frd%5Fr%3D113T325VC033CVZRPQZ3%26pf%5Frd%5Ft%3D101%26pf%5Frd%5Fp%3D379103301%26pf%5Frd%5Fi%3D507846&amp;tag=siliconval043-20&amp;linkCode=ur2&amp;camp=1789&amp;creative=9325">Order the amazing Amazon Kindle Electronic Book Reader - find out why people are raving about it.</a><img src="http://www.assoc-amazon.com/e/ir?t=siliconval043-20&amp;l=ur2&amp;o=1" width="1" height="1" border="0" alt="" style="border:none !important; margin:0px !important;" />

There were lots of great comments on one of my posts this week on a job ad from the future:

Wanted: CMO for Startup - Must Have a Good PageRank

Wanted: Chief Marketing Officer for a Web 2.0 startup based in San Francisco. Candidate must have a blog with a PageRank of at least 5 and/or at least 800 followers on Twitter and/or 1500 friends on FaceBook or LinkedIn. Competitive salary, benefits and stock options.

The interesting thing is that I had written almost the same post February 1 2006:

A job advertisement from the future . . .

Wanted: Head of Corporate Communications for a fast growing Silicon Valley startup. Competitive salary and stock options. Candidates must have a Google PageRank of at least 5. And/or an Alexa rank of at least 750,000 or better.

Candidates with at least 1,000 Google hits on their name are also eligible. We will also accept web site traffic numbers from your posts/articles on third-party web sites. This is a senior VP level position.

I just got one comment on that post, which was great.

There are several points I wanted to make regarding the current trend to pay writers based on pageviews.

If I were looking at my pageviews and comments to decide on the types of stories I should be writing then I would never have written about this topic again. Which is why I do not look at the popularity of my posts in deciding what to write about. I write about what interests me and I hope it might interest someone else. And it usually does even if I have to wait a while.

Yet the trend is to pay writers based on pageviews and that is a mistake imho. However, these are the economics of the online media business model and that's what publishers are responding to.

Fanboys subsidy . . .

Do we let the popular articles about Apple fanboys subsidize articles on more esoteric subjects? That's what used to happen in newspapers and I say we should continue that practice otherwise we will just get content that wins based on the popular thinking at that specific point in time. We will lose a diversity of media content.

Also, there is a way to have your cake and eat it. I regularly trawl through my posts from nearly 4 years ago and I rewrite some of them several times in different ways over the years.

I've found that some of the concepts and ideas I write about are not yet yet ready for prime time and only a couple of people will notice them. But that's OK, because eventually more people will respond to my posts as some of these ideas become more widely understood.

Other publications could do the same, rewrite certain articles a year or two years later because more people will understand the content and find it relevant to them. But this means paying journalists to write articles that aren't related to the number of pageviews.

We need publishers with foresight and the courage to hold up journalistic practices developed over hundreds of years. We shouldn't have to reinvent the wheel.

But my bet is that we will have to reinvent the wheel because that's what happens whenever an industry is disrupted - it has to be rebuilt over again and the things that we once knew to be best practices have to be discovered all over again.

Associated Press recently said that excerpts from its stories should not be used by bloggers unless there was specific commentary about the excerpt. Dan Farber sums things up nicely here: Welcome to the Web refactory, AP

Fundamentally, the Web is a content "refactory," in which new material is factored out of antecedent matter and connected in an information "web" via links and snippets.

The AP or any other source of so-called original content that is built partly on preexisting content easily accessible on the Internet can either participate in the Web refactory and live with the fuzziness, or become a pariah.

Foremski's Take: Critics of the AP policy say that it will lose Internet traffic for its stories. But it can't monetize that traffic effectively anyway.

Also, there's an interesting wrinkle here. AP is owned by 1500 daily newspapers. What if each daily newspaper allows excerpts and links? Will AP change its syndication rules with its owners? Will its owners be happy with such a policy since it could decrease traffic to their online sites?

Or is this the tip of an iceberg - will daily newspapers also institute such a policy?

How about news aggregators such as Google News? They take the headline and first paragraph of a news story without even blogging anything about it. Interestingly, Google does have a financial deal with AP so maybe other news aggregators will get a call from AP's lawyers?

The Wall Street Journal is moving to News Corp's HQ in midtown Manhattan on 1211 Sixth Avenue, just a stone's throw from the Financial Time's US HQ on 1330 Sixth Ave. This is a long circuitous journey back to the heart of the US media capital for Robert Thomson, the former head of FT US and recently appointed managing editor of the WSJ.

Robert Thomson is a long-time friend of Rupert Murdoch, both are Australian, and both have newspaper ink in their veins. Rupert Murdoch has proved himself as the savviest media tycoon on the planet, and Mr Thomson is not too shabby himself.

I worked with Mr Thomson when he was editor of the US FT, when he presided over the launch of the US version of the FT in 1999. Those were thrilling and heady times to be a journalist, the FT was pouring more than $100m into the launch, and we were taking on the Wall Street Journal in it's own backyard.

Mr Thomson had assembled a fantastic team of talented journalists and editors and we were all raring to go. We were the underdogs against the massive Dow Jones. And we were getting great stories the tough way--not with pre-briefings or stories handed on a plate--but scoops through hard-nosed journalism.

It was the best place to be bar none and I revelled in being part of the most exciting new media launch in decades. Visiting the US HQ for editorial meetings was always a high point, I would always return to San Francisco refreshed and recharged. And a lot of that was due to Mr Thomson's leadership and the people he recruited.

He could draw you into conversions and share things that he knew you would never repeat. That created strong loyalties. And it was part of a management style that helped create a great camaraderie within our editorial teams.

Mr Thomson's loyalty to the FT was shaken when one of his main rivals, Andrew Gowers, was appointed editor of the FT in 2001. In March 2002 Mr Thomson was recruited by Rupert Murdoch to run The Times - one of the world's oldest and most famous newspapers.

The Pink 'Un . . .

Most of the US watchers of the Rupert Murdoch takeover of Dow Jones and the Wall Street Journal have focused on the potential challenge facing the New York Times from a revamped WSJ. I would be less concerned about the Grey Lady and more concerned about the challenge to the "Pink 'Un."

Over the past six years Mr Thomson has delighted in hacking away at the FT, recruiting some of its best journalists. Now Mr Thomson will get a chance to do the same in the US, on the same street as the FT, and at the helm of its largest competitor.

The arch strategist of the FT's US success is now its arch rival. This will be interesting.

- - -

Please see:

Updated: Wall Street Journal To Drop, Well, Wall Street

Thomson Named DJ Editor-In-Chief, WSJ Managing Editor; DJ Head Hinton Adds Publisher Title

Robert James Thomson - Wikipedia

Robert Thomson - I Want Media

The Times - Wikipedia, the free encyclopedia

I'm spending much of Wednesday and Thursday at Stanford University at the Innovation Journalism conference organized by David Nordfors, who leads the Innovation Journalism program at Stanford. I'm speaking on a panel on Thursday afternoon.

It's a good event because it pulls together top Silicon Valley journalists and also journalists from around the world--with a heavy bent towards Scandinavian business journalists because of Mr Nordfors' Swedish roots.

I don't see that there is much difference between innovation journalism and journalism. Both require the same skills to do well and the subject matter shouldn't matter. However, I do agree with the tag line for this year's conference: "Journalism driving innovation - innovation driving journalism."

That's exactly what I've been seeing and saying the past few years. The media industry is where there is an enormous amount of innovation occurring - and where you find a lot of innovation that's also where you see massive disruption.

Running around the valley . . .

For 20 some years I covered Silicon Valley's innovations, running around interviewing people, looking over their shoulders and saying "that chip/software/hardware looks interesting, tell me about what you're doing."

Since I left the Financial Times nearly 4 years ago, I've had other journalists interviewing me, looking at what I and my colleagues in "new" media have been doing, and saying "That looks interesting tell me about what you're doing." It doesn't get any better than this...

It's a Media Valley . . .

Silicon Valley is transforming into a Media Valley. When I would say that a few years ago few people understood it. Now more people understand it especially when I say it this way: Silicon Valley's largest and fastest growing companies are media companies - Google, Ebay, Facebook, Yahoo, for example, are media companies: they publish pages of content with advertising around it. They are not tech companies they are technology-enabled media companies, there is no tech you can buy from them." The same is true for many of the Web 2.0 companies and their Google AdSense based business models, they are technology-enabled media companies.

My Japanese readers have been particularly intrigued with this concept of Silicon Valley as Media Valley. Last year I was featured in Nikkei business magazine on this topic--this is Japan's largest business magazine. Tokyo Week newspaper sent its New York editor to interview me about another local media sensation: LonelyGirl 15.

And earlier this year a TV crew from Japan's most prestigious and largest TV channel, the equivalent of PBS, came over to my living room to kick off a week-long investigative piece on Silicon Valley and its transformation into Media Valley.

There is a quick video at the end of this post which I took as they walked in and we chatted about what we would talk about. I'm always flattered by such attention but it always feels like a hall of mirrors ...media talking about media. But then again, media loves talking about media.

That's what we'll be doing the next couple of days at Stanford, media talking about media. Join us if you can.

This is an interesting deal: CBS paying a nice premium for CNET Networks. Here is the story by Steve Gelsi at Marketwatch:

Upon closing, CNet Networks' sites will be combined with CBS's existing Internet unit, which oversees CBS.com, CBSSports.com, MaxPreps.com, CBSNews.com, last.fm, Wallstrip and MobLogic.

Analysts cautioned while CBS stands to benefit from the move, the premium it's offering may be questionable.

Chart of CNET

"It's a very efficient way for CBS to expand its advertising reach, by offering CNet advertisers the chance to bundle ad buys across more of its properties," said Sarah Rotman Epps, an analyst at Forrester Research.

However, CBS could be overpaying for CNet's aggregate monthly audience of more than 140 million users, Epps said.

Underscoring the risks of the deal, Jason Bazinet of Citigroup pointed that the overall advertising climate has been "sluggish" due to a weakened U.S. economy.

The key challenge for CBS, said Bazinet, will be how to sustain the premium rates CNet's sites have been able to charge advertisers. He estimated that CNet has commanded about $12 per thousand page views, "well above" rates earned by rival Web sites.

Marketwatch used be called CBS Marketwatch - a joint venture between Financial Times publisher Pearson and Viacom, the owner of CBS. It was sold to Dow Jones in January 2005 for $500m. Is this CBS taking another shot at becoming a strong online publisher? Will it be more successful this time? It's often difficult to change the culture of a company and at CBS the culture is strongly based in what used to make a lot of money for the company: TV.

[Hat tip Jeremy Pepper's Twit]

Harry McCracken, PC World's Editor-in-Chief is leaving the magazine as it celebrates its quarter century anniversary.

I'm one lucky guy. In my position as editor in chief of PC World, I have one of the best jobs in technology journalism. I get to do work I thoroughly enjoy, and to be part of a remarkable team who serves an equally remarkable universe of online and print readers. PC World turns 25 this year, and I've been very proud to be associated with it for over half of that quarter century. When I joined the staff in October 1994 as an associate editor, I never, ever would have believed the ride would last this long.

I could happily do this job forever--but new challenges are good, too. And here's a bit of breaking news for you: After giving it a lot of thought, I've decided to step down as editor in chief and launch a technology site of my own--one that I'll build from scratch and launch this summer.

Read the rest here: PC World's Techlog My New Adventure

I'm a long time admirer of Mike Magee, a veteran journalist and media entrepreneur. He just launched his latest publication: IT Examiner, which is based in India, not in the UK as Mike prior ventures.

I met with Mike when I was back in the UK in December. He mentioned he'd been visiting India lately and I put two and two together.

Here is Mike describing the project on his blog Mad Mike Magee's Musings.

In just a few days from now I will join the four staff I have already hired in Ole Bangalore, and supervise the introduction of the IT Examiner to the global scene.

There will also be an assault and battery of several freelancers contributing to the mix - the aim of the magazine being to interpret what’s happening in India and China to the rest of the world.

This magazine will not compete with tabloids like the Rogister and the INQster. We will be introducing journalism to the world and the workspace of the world as you haven’t seen it before. Our Indian journalists will be digging deeper and deeper to get our readers stories.

The Rogister is The Register, a news publication Mike Magee co-founded in 1994, it was the first completely online news site. He fell out with his partners and founded The Inquirer (INQster). He sold The Inquirer to VNU, a Dutch based media company in 2006.

Mike Magee has become a serial media entrepreneur, a quality that is rare among the UK press corps.

BusinessWeek's cover story aims to analyze how Microsoft will take on Google without Yahoo. It boils down to MSFT's top salesman Keith Lorizio.

Foremski's Take:

Even if MSFT had a hundred Keith Lorizios - it wouldn't do much good. Because there is no way that it can grow its ad business organically to match the flood of money moving into online ads.

Microsoft said it itself, when it launched its bid for YHOO:

The online advertising market is growing at a very fast pace, from over $40 billion in 2007 to nearly $80 billion by 2010.

The online advertising market will double in three years! Even if MSFT doubled its online ad business every year for three years it would reach about $24 billion out of a total of $80 billion leaving billions on the table for competitors.

Even if MSFT executed brilliantly in its organic efforts it would still miss what is probably the biggest gold rush opportunity in advertising since the radio was invented.

That's why MSFT needs to make media acquisitions -- and quickly.

- - -

Please see:

Andrew Finlayson, VP and News Director Fox News Chicago writes:

I'm part of a team of journalists in a newsroom in Chicago who have put together something new that I thought might interest you.

Think of it as a little experiment in what some journalism might become.

We are working on a website called www.LiveNewsCameras.com The concept is simple, let people watch news as it happens anywhere in the world…raw, unedited on your computer at work or home.

It officially was made public on Super Tuesday (although we had been tinkering with how to do it for months) with just a couple of feeds focusing on the Republican and Democratic candidates that has grown to 150 streams around the world.

We think it will double that soon because we keep hearing from stations that are starting up live streams. This little newsroom experiment now has ABC, CBS and NBC stations involved…all with the permission and partnership of the newsrooms we link to.

We streamed the hearings about Iraq, we streamed the Pope almost from the moment he arrived to when he went home…nothing unusual about that…but we also stream the presidential candidates live every day…sometimes two or three times each a day as they go around the country. No one else is doing that.

You might have an opinion on this…or even a live feed that you know of that we could link to. Imagine what will happen when every mobile can stream live video…we are working with such a phone right now. That means “live on scene on every screen” is very close…including every press conference.

Like to see what you think. Our informal motto is “Veritas odit moras,” from line 850 of Seneca’s version of Oedipus. It means “Truth hates delay.”

Foremski's Take:

I'm interested to see how this develops. It sounds like an online CSPAN but with more channels. I like CSPAN but it seems that this approach misses the journalist, I don't have time to watch live feeds, I want a two minute summary or less. Beat reporters know which two minutes are worth watching and that's where journalists add value, imho.

Andrew Finlayson replies:

We have a moderator that gets notifications from the newsrooms about what they are streaming and points to this in the chat, the twitter and soon will be able to highlight content through a dynamic front page.

We have found many people appreciate these pointers but want to pick what they want to watch. They want the raw and unedited feed…like that we are offering of Obama right now (which CNN and Fox is doing…but often they do not carry all of the speech like we do from different places around the country)…

That is why it is an experiment…if we provide the live and unedited…what does that mean for journalists? I believe every newsroom (including newspapers) will want to cover major stories live and then provide the various versions from that point forward.

I won’t bore you with more of my thoughts but we brainstormed this up when we realized that soon technology will allow us to stream live quality video anywhere…and at a reasonably low cost

Recently I had been writing about the business opportunities for media companies acquiring advertising networks and advertising networks acquiring media companies. We are starting to see this happen. Please see: The future battle between ad networks and publishers

Today Cox Enterprises announced it had acquired Adify, a leading ad network, for $300 million in cash. I spoke with Joelle Kaufman, VP of marketing at Adify, and Rodney Mayers assistant VP of interactive media at Cox.

Mr Mayers characterized the acquisition as being strategic to Cox and that Adify would continue to operate as an independent company. Cox would not receive any special treatment from Adify, such as favorable split in advertising revenues.

"Cox has a long history of nurturing companies and enabling them to grow. Plus Cox brings to Adify a knowledge of the advertising industry which will be beneficial to Adify," Mr Mayers said.

Will Adify's business suffer because its current customers might be discouraged by a large media owner? Ms Kaufman said that Adify had spoken with all of its customers and that they saw no problem with the acquisition. She said that some had said that if it were a media company other than Cox, they would have a problem with the deal.

Foremski's Take:

This is a very good acquisition for Cox because Adify has an excellent technology and console for publishers and advertisers that enables complex advertising placement. I don't know of any other company that has a competitive technology of this type.

Cox could help move Adify into radio and TV advertising placement, which is where Google is moving. Adify has a much better console than Google's ad network and with Cox behind it, it can scale more quickly and potentially become a competitor to Google in key markets.

However, Adify may find it more difficult to acquire new customers because there will be a natural concern about the Cox connection. Adify knows a lot about its clients such as: how much ad revenue they are making and how well those businesses are performing. This is valuable competitive intelligence and Adify will likely have trouble convincing clients that this data is kept confidential, even if it is.

Cox said it is a strategic investment. This implies that Cox sees value in terms of its overall business--which means it provides it with a competitive advantage. Mr Mayers also said that Cox brings expertise to Adify in terms of its understanding of the advertising business. This doesn't describe an independent company, imho. Which will mean that potential Adify customers will think twice and thrice before committing to Adify.

Cox can more than makeup for any loss of business because of its large media holdings but there is a clear question mark on long term growth because of the ownership. This will spur other startups to create a similar technology to that of Adify.

If a coalition of media companies had invested in Adify, that would have helped it scale even faster, and helped it become a potentially stronger competitor to Google and other large advertising networks.

Right now there are few ad networks left that have not already been acquired by Google, Yahoo or Microsoft. Cox is showing that this is a media industry and that GOOG, YHOO, MSFT are competing in the media industry. These are technology-enabled media business groups and not technology groups. It is an important distinction.

- - -

Please See:

Adify Blog:

As Adify began raising our third round of financing to fund our expansion, Cox Enterprises, based in Atlanta, expressed interest in acquiring us. Although Adify was not seeking an acquirer, Cox’s history, resources, and people demonstrated that it would be a very compatible business partner and the perfect home for our company. Cox is a 100+ year old diversified media company with a long history of investing in new media businesses, serving the advertising community and, above all else, a company-wide dedication to customer service. Their known reputation for superior service all starts with a deep commitment to investing in their employees. Operating Adify independently within Cox will enable us to continue building Adify by giving our company considerable new resources to deliver superior value to our customers and to compete in the online advertising marketplace.

FM Media Looks To Invest In Content Companies And Tie Up Multi-Year Ad Contracts

Arrington Should Watch Out Because J.B. Is About . . . Ad Networks Will Roll Up Media Companies

Toktumi and Adify...

Amy Graham over at Poynter.org has written a great article about the attitudes of some journalists towards the changes happening in the industry.

• The only journalism that counts is that done by mainstream news orgs, especially in print or broadcast form. Alternative, independent, online, collaborative, community, and other approaches to news are assumed to be inferior or even dangerous.

• Priesthood syndrome: Traditional journalists are the sole source of news that can and should be trusted -- which gives them a privileged and sacred role that society is ethically obligated to support.

• Journalists and journalism cannot survive without traditional news orgs, which offer the only reliable, ethical, and credible support for a journalistic career.

• Real journalists only do journalism. They don't dirty their hands or distract themselves with business and business models, learning new tools, building community, finding new approaches to defining and covering news, etc. As the Louisville Courier-Journal staffer Mark Schaver said just this morning on Twitter, "[Now] is not a good time [for journalists] if you don't want your journalism values infected with marketing values."

• Journalistic status and authority demands aloofness. This leads to myriad problems such as believing you're smarter than most people in your community; refusing to "compromise" yourself professionally by engaging in frank public conversation with your community; and using objectivity as an excuse to be uncaring, cynical, or disdainful.

• Good journalism doesn't change much. So if it is changing significantly, it must be dying. Which in turn means the world is in big trouble, and probably deserves what it will get.

She goes on to say:

I realize that right now is a scary time for journalists who crave stability. I have immense sympathy for good, smart people (many of whom have families to support and retirements to plan) who fear the unknown. Many of the news orgs that have sheltered and supported these journalists as they ply their craft are crumbling due to their inability or unwillingness to adapt their business models -- leading to layoffs, buyouts, attrition, dwindling resources, overwork, and general demoralization.

. . .when too many people in any culture are in despair, that culture can easily become toxic (overwhelmingly negative to the point of becoming self-destructive or self-defeating).

. . .right now is a time of immense opportunity for journalism and journalists to take on a broader and even more vital role in society. It's a chance for journalists to not only continue doing good work, but maybe also to have more impact than ever before.

Journalism: A Toxic Culture? (Or: Why Aren't We Having More Fun?)

The future of journalism is to help individuals, communities, and organizations tell their stories. And to teach them how to tell their stories. The more we know about each other the less strange we will seem to each other, and that will help eliminate conflict and help our societies make the best decisions.

This is the best time since the invention of the Gutenberg press to be a journalist, imho.

I spent much of last week away from the Web 2-point yawn crowd. Instead, I was at my favorite conference, New Communications Forum held this year in Sonoma county.

I was speaking on two panels, the second one included Neil Chase, VP of Author Services at Federated Media (FM) Publishing. He is a former journalist at the New York Times.

On the panel he introduced himself and FM Publishing saying that the company "ran a network of blogs." Interesting phrasing since I thought that FM Publishing sold advertising for a number of top blogs, including Techcrunch, GigaOm, VentureBeat, UberGizmo, etc.

After our panel I asked Mr Chase if he had seen my recent news analysis of the online ad/blog market and that ad networks such as FM Publishing might start to acquire content companies because that was a quick way to boost revenues and also stop the larger sites from leaving FM's advertising network. FM recently raised $50m, and this looked like a war chest to me.

"We just got the money last week so we haven't yet put it to work." Mr Chase said. He said that FM was unlikely to acquire content companies, (although he later said that if there were some good opportunities FM would make an acquisition.)

FM was interested in making an investment in content companies, taking a 10 to 15 per cent stake in exchange for a multi-year advertising contract.

This confirmed some earlier reports that FM had hinted it might take stakes in key content companies.

"If some of the blogs want to take some money off the table so that they can put their kids through college, we would be able to help them do that," Mr Chase said.

Also, if a journalist was looking to leave and start a blog FM would help set them up in exchange for a larger share of the advertising revenues.

He said that FM wasn't worried about its blog sites leaving the network and there were plenty other blogs to work with.

FM has started to see some effects from the recession, some clients are taking longer to make a decision on advertising deals.

Foremski's Take:

FM can make its money go further by taking a 10 to 15 per cent stake in a content company. And also tie up advertising revenues for two to three years into the future. It's a good strategy.

But the blogs in its advertising network overlap in coverage--that's why it can sell advertising across an aggregated audience. If FM has stakes in some of its blogs it becomes a competitor to the others--it has a vested interest in favoring one blog over another. It can channel ads to sites in which it has an ownership stake.

This could lead to a loss of blogs to a rival ad network and make it difficult to recruit new publishers.

But taking a minority stake in a blog leaves FM open to a substantial dilution of its ownership as the blog company grows and takes on new investors--unless it has a board seat.

Most blog owners are novice entrepreneurs and they should be careful about the terms of an FM investment and seek expert counsel. Taking a nice chunk of cash now is a welcome reward for their hard work but they should make sure there is no remorse further down the line.

[BTW I took a look at UberGizmo and FM was running public service ads on the site while TechCrunch was getting lucrative Intel ads, showing that not all sites are treated equally.]

. . .

Please see:

The future battle between ad networks and publishers… | Tom Foremski: IMHO | ZDNet.com

Arrington Should Watch Out Because J.B. Is About . . . Ad Networks Will Roll Up Media Companies

Battelle Turns Down $100 Million Offer For FM Publishing. Decides To Shop Around For a Higher Price.

Microsoft pays star writers to recite slogan

Federated Media’s Battelle Slams Rival, Hints At Investing In Publishers

About Us - Federated Media Publishing

I've been a fan of the astonishingly young and talented Jared Kopf for a while, ever since I met him several years ago when he was working with the astonishingly young and talented Max Levchin at Slide.com, (and part of the Odessa mafia :-).

Jared is smart much smarter than his years (and many peers) and he has already paid a lot of dues. For the past two years Jared has been working on a new project the launching of AdRoll, an advertising network that seeks to link up advertisers with community-specific networks of small online publishers.

Normally I'm not a big fan of advertising networks. They charge too much and they are not a defensible business because online publishers can potentially handle their own advertising once they reach a certain size.

But AdRoll could turn out differently. We'll see how its blend of social marketing tools and ad serving technologies disrupt some of the larger networks such as FM Publishing, Adbrite, and BlogAds. AdRoll can certainly give them a run for their money and more. [BTW FM Publishing just raised as much as $50m.]

AdRoll today emerged from private beta and is now in public beta. Anyone can sign up on their web site and recruit other web sites, set advertising prices, etc. Advertisers can buy space on an AdRoll network in one lump without having to verify out each individual site and make individual deals.

Media buyers like to buy large numbers of the same type of audience. AdRoll rolls up many smaller audiences into a larger single entity and takes a cut of between 20 to 30 per cent of revenues in return for serving the ads and providing a collection of management tools.

"Smaller brands can use AdRoll to connect with communities that they wouldn't be able to reach through larger online publishers," says Jared.

Challenges...

Earlier this year I spoke with Adify, which has a great console and can place ads at different times, sites, etc and also allows people to create their own networks, and it takes about a 20 per cent share of revenues. Adify might be a bigger challenge for AdRoll. FM Publishing takes a larger cut but it goes out and sells ads which AdRoll does not.

A young man's game...

Still, pricing is a flexible thing, and servers are cheap--it'll be the design of AdRolls' technology and its relationships that will determine success. Jared and his colleagues are young, with a low cost of operations (and no family support payments yet), which means AdRoll can dig in for the long term while other ad networks that have taken on large investors don't have that luxury.

- - -

Join a Silicon Valley Network...

I'm going to try out AdRoll and I've created a Silicon Valley Network of like-minded web sites that includes Silicon Valley Watcher. So if you have an online site, a blog, or even a company product or service, sign up with my Silicon Valley Network. We'll share in the ad revenues and see if there is money to be made in these types of advertising networks. I've set quite a high CPM of about 1 cent per impression, after all there is no sense (as in Google AdSense) in devaluing your brand.

Send me an email tom(at)siliconvalleywatcher.com if you are interested in exploring this further.

Here is how AdRoll works in 45 seconds:

There has been much chatter about ads on blogs lately.

Steve Hodson:

While ad networks rely on the page view count in order to decide whether they want to do business with you there is never any value placed on the fact that you might only have a 1,000 visitors that come by everyday to read what you are writing. Just as they won’t taking into account that you have a few thousand RSS readers who faithfully pull your feed everyday to read what you write.

Here is Sramana Mitra:

The networks, I am afraid, have a LOT to learn. At this point, they are pretty clueless about how to use their chips, including traffic, brand, and ad sales forces. They don’t really understand how to use links, they don’t know how to sell high CPM ads, and they don’t know how to converse with the blogosphere effectively.

It's really not about ads on blogs but rather online advertising in general. Back in December 2005 I issued this challenge:

Innovative Sponsors Needed

When it comes to advertising, I'd rather work with companies that would like to be innovative, try different things, and I've got a ton of ideas and challenges if that sort of thing appeals to you.

For example, let's turn the space occupied by a banner advert into something different, something useful. I don't know what that might be yet, but I have some ideas, and you have some too--that's where the innovation comes into play.

Are you feeling innovative? Call me, my cell is 415 336 7547.

It's taken a while for me to find an innovative sponsor. Intel has come to the forefront, which is great. I hand coded a demonstration media widget for Intel (it is on the right) and worked with Ken Kaplan over at Intel on this project. He likes this approach and I like it too.

The media widget is different from regular ads because we filter out banner ads, skyscraper ads, etc all the time. We have an in-built ad-blocker in our heads.

The media widget is different because done right, its content can change all the time. It is informative rather than a marketing slogan. It can be RSS enabled for quick updates, and it can be set up to showcase the latest news, blog posts, podcasts, vidcasts from a company. It can also be made shareable, and can be embedded in any web page.

The Intel media widget is a hand-coded demo for now. Newsgator has offered its technology to take it to the next level.

Are you innovative?

I'm looking for four other sponsors for SVW that are innovative companies and would like their new/social media showcased on Silicon Valley Watcher within a media widget..

I have space for only one PR company to use the media widget to showcase their new media practice and also their clients.

Are you feeling innovative?

Call me on my cell 415 336 7547. Or email tom(at)siliconvalleywatcher.com.

I'm waiting for Dan Farber, the new head of CNET's News.com, in a large, sun-lit foyer. People are coming out for lunch and their mood seems relaxed and cheerful despite a 10 per cent cut in CNET staff numbers made just just a few days before.

Dan comes down and we walk out to have lunch. He chooses a restaurant that has real tablecloths. "I need to eat some real food," he says. I nod in agreement, the single, blogger lifestyle, doesn't encourage good eating habits.

It is always a pleasure speaking with Dan because we speak the same language. I'm not saying this in an elitist way, but there is something that happens to you through the experience of blogging, that does change your perception of the media industry, and provides an understanding of what is going on that cannot be attained by reading about it.

It doesn't matter if you've been a media professional for decades, or how young or old you are, understanding the changes going on in the media industry comes from experiencing it first hand. You can see what I like to call the "trajectory of ideas" in the mediasphere, how media is consumed and shared.

And it is that understanding that Dan Farber brings to his new job, as editor-in-chief of News.com, one of the first online news organizations.

Dan nods as I say that we speak the same language. "Things have changed a lot in this business. There is a velocity to news media and you can see it as a blogger," he says. "There is no end to your day."

Over at ZDNet, Dan set up a large blogger network (I write there too) and he was probably the most prolific of the entire group, often writing posts late at night and many times throughout the day.

"I have to restrain my blogging these days, because we have writers with beats," he says. "But everyone now blogs at News.com, it doesn't matter who you are, even if you are in production, you blog." (Dan's new blog at News.com is Outside the Lines.)

Dan has a team of about 35 people, most of them reporters and editors plus a few software engineers. And he is leading CNET's premiere brand: News.com.

Emergency meetings...

Tom Waldrop, over at Intel (Intel is a sponsor of SVW) told me an interesting story about the launch of News.com. He said that the corporate communications team at Intel had an emergency meeting to discuss whether online journalists were real journalists and how they should work with them.

When I left the Financial Times in mid-2004 to become a journalist-blogger, about a decade after News.com launched, Intel had another emergency meeting. Tom Foremski has left the Financial Times to become a blogger. Are bloggers real journalists? How should we work with bloggers?

It wasn't just Intel asking those questions. Tens of thousands of corporations worldwide are still trying to figure out the changes in the media industry, and who is or isn't a journalist, and how they should respond...

News.com was once a leading light of the change in the media industry towards an online media world. For example, CNET's decision to drop print publications (except in China) was a bold one.

Lost the lead...

When I met with Shelby Bonnie, the former CEO of CNET, in mid-2004, he told me that the company had 5 different publishing systems, and two large data centers. It was trying to reduce the number of publishing systems.

CNET tried to create one publishing system, Project X. However, this was later abandoned, at a cost of about $60m according to one of my sources. This was not atypical, many media companies were trying to crete their own content management system. The Financial Times was shifting to a new, never before tried publishing system, when I was there. It broke down several times a day, it cost millions of dollars to develop. Some days it was a wonder that we managed to produce a newspaper.

All of this meant that News.com was not leading the next big change in the media industry: the adoption of the blogging platform as a two-way publishing platform linking journalists and readers.

Bloggers take the lead...

Upstarts such as Mike Arrington, publisher of the popular Techcrunch blog, are these days seen to be in the forefront of the new changes in the media industry, and are challenging even relatively new media companies such as CNET .

Mike Arrington recently revealed a plan to deliver a "crushing" blow to CNET by building a "dream team" of bloggers and rolling up prominent blogs into one organization.

Dan Farber smiles at the mention of Mike Arrington. "We are a better platform to roll up blog sites because we have the infrastructure, we have ad sales people, etc." I agree. I can't see the over-sized personalities of the blog world sharing the same planet let alone the same company.

CNET could potentially regain its lead in pioneering the new media world. And that's what Dan Farber can provide: the blogger publishing experience from the front lines of the business.

Among the changes Dan Farber has already made:

-Different CNET departments now publish using the same template.

- Publish a story as quickly as possible, edit it later.

- Stories are updated constantly.

- Adding the right keywords and tags to make stories discoverable by search engines. About 40 per cent of CNET traffic comes from search engines.

- Use Internet standards whenever possible.

- There is no end to the work day, you are always on call.

- Everybody blogs.

- Create synergies between news, reviews, analysis, and blogs.

- Getting journalists to put in web links to non-CNET publications. "It's about being part of the web and not separate from it," he says.

- Carrying a pad of paper and pencil is not enough. Journalists also take photos, videos, and make podcasts.

I know that some of my colleagues at large media companies are not too happy with all the extra work they now have to do: blogging, video, podcasts etc. Dan says that his team gets it and is happy with the changes.

New skills...

You can certainly teach an old dog new tricks, Dan and I are living proof of that. I've got nearly 25 years under my belt as a journalist and Dan has a few more than that.

It just goes to show that this "new media" has nothing to do with age, there is no "generation gap" it is an "experience gap." And Dan is making sure that his News.com team gets that experience and is ready for this new, always on world. (I'm finishing this at 3 am Monday morning.)

Dan Farber can bring to CNET the best practices of the new media world, but as he says, he doesn't have control over everything. CNET still needs to sell ads and control costs within a challenging time for all media: a complete revamp of the media industry business model.

As I like to say: These are the best times to be a media professional because we will never ever be at such an amazing and disruptive change in our industry in our lifetime.

The trick is to make sure you are on the right side of the disruption, and not on the sharp pointy end of it. Can CNET become a disruptor? That's part of Dan's challenge, and that's what makes his new job one of the most interesting jobs in media.

Blogging is stressful, you are always on. Matt Richtel at the New York Times nailed it: In Web World of 24/7 Stress, Writers Blog Till They Drop.

Here are some of the other dangers (tongue-in-cheek) of the rock-and-roll blogger lifestyle:

GigaOm:

Dan Farber:

Gabe Rivera:

Renee Blodgett:

Craig Newmark:

Ze Frank:

Nick Douglas (et moi):

Bloggers in training:

I'm going back to using my regular Gmail account for pitches. Facebook doesn't have the tools to manage email plus it send me lots of emails to tell me I have lots of emails on Facebook.

My original post: PR Pitches Through Facebook: I Have 37, 366 Unread Emails in Gmail... 2 months ago, caused a bit of a stir. (I'm up to 44,548 unread emails.)

I was hoping that Facebook might make my life a little easier but I also realized that I was seeking something else: connection.

If we are linked on Facebook or as an SVW subscriber, you know something about me and vice versa, and that makes my professional life a lot easier. It's that connection that I want to take further:

I will give priority to PR pitches from people that are connected to me through:

- Facebook

- LinkedIn [tom(at)siliconvalleywatcher.com]

- Subscribe to the SVW newsletter:

- Subscribe to the SVW newsfeed: http://feeds.feedburner.com/SVWatcher

Subscribe to Silicon Valley Watcher

Subscribe in a reader

- Follow me on FriendFeed http://friendfeed.com/tomforemski

- Follow me on Twitter (tomforemski)

Read and sometimes leave comments on my sites: Silicon Valley Watcher, Silicon Valley Minute, ZDNet: IMHO

Because then I know that you know me, you know what I write about, and what interests me. I don't want to hear "what have you been writing about lately?"

At the very least I would like you to be a subscriber to my SVW email newsletter or my SVW newsfeed (I'll be able to see your name in most cases.)

One or more of the others would be great. I'll still be deluged and cannot guarantee anything but I will try to prioritize my "connected" contacts!

- - -

[Software engineers: If someone could create an app for me that can track my most connected contacts that would be great. I'm sure others would also find an app like that very handy...]

Software engineers have to update their bag of skills constantly. They learn new programming languages, new web standards, new development systems, and new lexicons constantly.

Most traditional journalists can barely type, they certainly can't spell. And they are unusually useless in terms of PC and other tech skills. But they know how to create compelling media and are able to do it consistently.

With all the new changes brought about by the Internet becoming the publishing platform for all media, journalists now need a few new skills. They don't need to know them well, as in typing and spelling, but they do need to know a bit about them, so that they can flourish as the media sector transforms itself.

Ten basic new media skills that today's journalist should know:

1) How to upload an image to a blog. (I know journalists that don't know how.)

2) How to add a link to text in an online story.

3) How to take and edit a photo and resize it for a web page.

4) How to embed the code for a video in a web page and resize it.

5) How to find relevant links to a story and add them to it.

6) How to take a digital video, edit it, and publish it in several formats.

7) How to make online stories discoverable.

8) How to read HTML and be able to fix common problems.

9) How to read CSS and be able to make modifications in stylesheets.

10) How to survive in an always-on work day, and produce two or three times as much content as before.

It seems that the consolidation in the huge number of online video sites is beginning...

Stage6 is closing February 28. This is a high definition video site set up by DivX to promote the high quality video codec and then it was spun off as a private company in July 2007.

The problem that Stage6 ran into was that it is an expensive business to run especially when the business model for online video sites has yet to be determined. It's a problem that the other 100+ online video sites are facing each day. It's clear that many of them will make the same choice as Stage6 and shut down.

What happens to all the video work from users that uploaded and linked to the content? A lot of broken links...

Here is a statement from Stage6 about its closure:

I'm Tom (aka Spinner), a Stage6 user and an employee of DivX, Inc., the company behind the service. I'm writing this message today to inform you that we plan to shut down Stage6 on February 28, 2008. Upload functionality has already been turned off, and you'll be able to view and download videos until Thursday.

. . . In many ways, though, the service did succeed, beyond even our own initial expectations. Stage6 became very popular very quickly. We helped gain exposure for some talented filmmakers who brought great videos to the attention of an engaged community. We helped prove that it's possible to distribute true high definition video on the Internet. And we helped broaden the Internet video experience by offering content that is compatible with DVD players, mobile devices and other products beyond the PC.

So why are we shutting the service down? Well, the short answer is that the continued operation of Stage6 is a very expensive enterprise that requires an enormous amount of attention and resources that we are not in a position to continue to provide. There are a lot of other details involved, but at the end of the day it's really as simple as that.

. . . As Stage6 grew quickly and dramatically (accompanied by an explosion of other sites delivering high-quality video), it became clear that operating the service as a part of the larger DivX business no longer made sense. We couldn't continue to run Stage6 and focus on our broader strategy to make it possible for anyone to enjoy high-quality video on any device. So, in July of last year we announced that we were kicking off an effort to explore strategic alternatives for Stage6, which is a fancy way of saying we decided we would either have to sell it, spin it out into a private company or shut it down.

I won't (and can't, really) go into too much detail on those first two options other than to say that we tried really hard to find a way to keep Stage6 alive, either as its own private entity or by selling it to another company. Ultimately neither of those two scenarios was possible, and we made the hard decision to turn the lights off and cease operation of the service.

For about three years now I've been talking about how Silicon Valley is transforming into "Media Valley" because our brightest, and our fastest growing companies are, according to my metrics, media companies.

Companies such as Google, Yahoo, eBay, Facebook, Digg are all media companies. They publish pages of content with advertising around it.

These are not technology companies but rather technology-enabled media companies. And this is a key distinction.

I've been writing about this change for about three years, and how the center of the media industry is shifting from New York city to Silicon Valley.

Our media industry is thriving and expanding, their (NYC) media industry is shrinking (as one example New York Times last week announced 100 newsroom job cuts).

Initially, only a couple of people picked up on my Media Valley concept, a couple of journalism professors at NYU. But gradually, over the past couple of years, more and more people have grown to understand this perspective.

This has been especially evident within the Japanese media community. Last year, I was featured in Nikkei business magazine, Japan's largest business magazine. And today (Wednesday), a four-person TV crew flew in from one of Japan's largest TV channels and interviewed me for three hours on this topic.

[I took some video that I will post very shortly, of them interviewing me, about the media industry. I love talking to the media about the media industry, but it always feels a little (sometimes a lot) Alice-in-Wonderland-ish, a hall of mirrors effect.]

In my world, I see everything as a media technology, and as a media strategy. I've said this before many times: Every company is now a media company to a greater degree than ever before. Even if a company makes steel, or napkins. Every company publishes to its customers, staff, partners, neighbors, to itself. It had better master the two-