Posts about Business

Yahoo, indeed

As a Microsoft shareholder, I’d be delighted if they are saved from buying Yahoo. As a Time Warner shareholder, I’d be delighted if they were saved from owning AOL. But I do think a Yahoo-AOL lashup is this is Dumb and Dumber, Incorporated. Who would run the thing? None of their current bosses, I’d hope. What would the strategy be? Nothing like what it is now: get out of portalthink and get into platformthink, please.

: LATER: A reporter asked for my take and predictions on the MyMicroYahOLSpace orgy. I said:

First, I think a Microsoft-Yahoo combination made little sense. It was Microsoft’s attempt to buy audience — as if you can own audience today, as if we can be bought and sold. That is the old-media way of looking at the world: they controlled content, marketed to get people to come to you, showed them ads, then waved good-bye.

The new way — the Google way — is to be distributed, to make your content, brand, and advertising exportable and embeddable (as with Google AdSense or YouTube videos or Google Maps). I believe that both Yahoo and AOL should follow that example, making everything they have exportable, and becoming a platform for individuals and companies to create and mash-up content and even start businesses.

The other opportunity is to become the ad network for this distributed world. Problem is, Google got there first. AOL and Yahoo have invested fortunes in ad platforms. Again, they did this in the old-media manner, trying to aggregate audience and networks under their roofs. Google, meanwhile, not only bought DoubleClick but also opened Ad Manager, which will serve anyone’s ads for free (and give Google the chance to serve its own ads when sites want). That will expand Google farther and faster than any acquisition like Yahoo or AOL could. If Google can also expand via Yahoo and Yahoo can get more revenue from that than from its own advertising — which says a lot about Yahoo’s strategy — then fine; but doing anything you can to avoid Microsoft is not itself a strategy; it’s a move of desperation.

Microsoft is trying to buy the online strategy is still has not managed to build on its own.

Yahoo and AOL are trying to regain an online strategy they lost. Will they be better together than they were apart? It depends on who manages them and who comes up with a strategy. Clearly, the incumbents at both companies have failed. This takes new leadership who understands the new architecture of the media world and I’m not sure where they’ll find that person. Trying to lash together these two failing strategies and cultures and come out with something new is a thankless task.

News Corp., meanwhile, is being very clever in trying to offload some of the risk of MySpace. People ridiculed the purchase when it was made. It turned out to be smart, as so often happens with the moves Murdoch takes that others ridicule. MySpace is worth more but its strategy is also somewhat unclear as Facebook — and even new platforms like Twitter — build deeper relationships with their members. So if Murdoch can get value out of MySpace now, at a high, and lessen his risk, then he’d be happy.

At the end, I think Microsoft could still win because it is the only one willing to pay much of a premium. Time Warner is a bit desperate to get rid of AOL but it won’t value it too low after having valued it way too high. News Corp. has already shown it is not willing to pay a premium and will only go along for the ride if someone else does.

There goes the neighborhood

(CommentIsFree asked me to write this post about AOL acquiring Bebo.)

Poor Bebo. I feel for the residents of their hip and convivial apartment block. It has just been bought by a slumlord.

AOL — which is paying $850m for the social networking site, the other Facebook — is where innovations go to die. Remember Netscape? Bought for $4.2b and now dead. AOL bought a mess of advertising platforms — Advertising.com, Quigo, Tacoda — and can’t make them to get along; the New York Times reports on continuing warfare that has resulted in AOL firing the business talent it just acquired. Back in 1998, AOL bought the pioneering instant-messaging platform ICQ and though AOL’s IM went on to become huge and though ICQ lives still, it was never the leader again. And then there’s what AOL did to Time Warner and its stock (which I bitterly regret holding onto from my days working at the magazine publisher).

In its purchase of Bebo, AOL — like Yahoo, Time Warner, Microsoft, and no end of media companies — is trying to buy the strategy it doesn’t have. And that’s a strategy that rarely works.

The terrible irony is that if anyone should have understood community and how to support, nurture, and profit from it, AOL should have. The problem is that AOL never understood its real value. At various times, it thought it was an internet service provider and then a portal and then an ad network. But all along, AOL’s greatest asset was the community of people under its nose: millions of enthusiasts in countless niches meeting and enjoying each others’ company in forums and chat and personal pages, the platform for community that AOL created.

AOL should have been Bebo before there ever was a Bebo. It should have been the Google of people. It should have been Facebook. Instead, having killed the golden goose of its own community — one it created as the social pioneer of online — it is going to the market to buy a tin gosling.

So what will become of Bebo? I shudder to think. These acquisitions rarely work well. We can look not just to AOL but also to Yahoo, which bought the wonderful photo service Flickr and bookmarking service Del.icio.us. Both live on but without the rush of innovation that made them so valuable and Yahoo has saddled each with its own klunky membership structure.

If history is any guide — and in AOL’s case, it certainly is — I fear that Bebo’s talented, visionary founders will leave in frustration or firings; AOL will bury the service inside its outmoded portal; and AOL will treat the people inside not as people but as ad inventory.

But then, maybe I’m just a pessimist.

No happy endings

A blunt assessment of the newspaper industry at Poynter: “Business has been terrible for a year now, it’s bad today and it will stay bad for quite a bit longer.” The trends aren’t going to look good. What’s needed are radical break-out strategies. What should local be online? I have my ideas, some of which I’ve blathered about here. What are yours? I think the question starts, again, not with what a newspaper can or should be but with what local means online.

DuPont’s internet-video ads on blogs

DuPont just launched a new series of internet-video ads — stories about science starring Amanda Congdon — that they are placing on blogs. Steve Baker of Business Week writes about it here and Josh Bernoff of Forrester here. Here are the videos with Amanda in a white lab coat, which has to be someone’s fantasy.

Full disclosure: I consulted on the effort. I was brought in because I know the folks at Rishad Tabaccowala’s think-do tank Denou at Publicis. When they started, they wanted to involve bloggers and I insisted that the only was to do that was through advertising on the blogs; it’s a clear relationship and it also gives respect to the medium and its people (I’m happy to see that Bernoff liked this). I introduced them to Amanda (which thrilled them; it was as if I’d snagged Oprah). And I gave some advice on the videos (obvious stuff: put your best stuff first, make them short and fun). And I suggested Bright Cove for the serving and Federated Media as an ad network. And they bought lunch.

I’m glad that we’re seeing internet video and blogs and ad money come together. This is the kind of new thinking you can bring to life in these new media. I will leave it to you to say what you think of the program and the videos:

: LATER: Radar goes after Amanda for shilling while also reporting with ABC. Legit discussion. But it’s not a first; she is making a Dove commercial at Blip and she made commercials for first first sponsors on Rocketboom. There are a bunch of different issues besides the one Radar raises, including how small shops will handle the sponsorship they get (a la Rocketboom).

: LATER STILL: See Amanda’s blog:

ABC and HBO both approved the DuPont spots. And under the “blogger” title, which is what I am, hello? I am not subject to the “rules” traditional journalists have to follow.

Isn’t that what new media is all about? Breaking the rules? Setting our own? I see nothing wrong with doing commercials, which is what they, quite transparently, are. If DuPont had tried to pass them off as authentic, homegrown videos, yeah, then that would’ve been wrong (and, of course, I would never have agreed to the project if that was the plan). . . .

It’s also about acting.

: THURSDAY UPDATE: Here‘s an LA Times story about bloggers in ads out of this.

Newspapers’ industrial suicide

Three of the (still) big newspaper companies, Gannett, Tribune, McClatchy, announced a joint effort to sell national ads onto their web sites. Now you might think I’d nod approvingly at that. But I’m not. I’m shaking my head in sad disbelief. For this only reminds me of the newspaper industry’s horribly failed effort to sell ads across the sites of a dozen big companies, the New Century Network, which failed because the companies simply could not work together. And the Journal story only points out that there are still fragmented, competitive efforts going on in the industry. The bottom line is that they are making it hard for national advertisers to buy their sites — thus, easier to buy Yahoo, Google, MSN, MySpace, et al. You see, newspapers all think they’re special. But they’re not.

Buzz, beer, and bubbles

Went to the second Paid Content mixer last night and it was jammed. The list of people Rafat and company attracted great. But Rafat and others complained that the noise kept the crowd from hearing Wall Street Journal honcho Gordon Crovitz. Alacra blog urged Rafat to keep the noisy “riff raff” out. I don’t think that’s the problem; it was hardly a riff-raff crowd. Neither do I necessarily think it’s about the venue, though this one was too disco, complete with a velvet rope and line (the last was a nice large room). The problem, I think, is that they’re trying to do too much, combining content and a mixer. The lesson, I think, is that people come for one or the other and they don’t want to stop mixing to start absorbing. My suggestion is that they consider two different kinds of events: one with a good and meaty discussion with the sorts of leaders whom PaidContent attracts (thus, no booze) and the other a mixer that lets people do their bubbly business.

Cooking books

Martha Stewart’s company projects is generating a third of its earnings from online — a higher proportion than other media companies I know.

Whither magazines?

Time Magazine just made a rash of brash decisions: cutting its rate base from 4 to 3.25 million (now barely ahead of Newsweek’s 3.1) by getting rid of junk circulation; raising its cover price by a buck to a rather ballsy $4.95; cutting five of its eight special demographic editions; and trying to convince advertisers to buy based on the alleged count of readers vs. the actual count of magazines sold. It’s looking bad for the old beast.

Just before I read the Time press release announcing this yesterday (on my Treo, not in print), I ran into my former colleague, Conde Nast Editorial Director Tom Wallace, at FourSquare, and I was downright optimistic about his magazines.

The difference? I think that general-interest magazines may well be fated to fade away. General-interest anything is probably cursed. For the truth is that interest never was as general editors and publishers thought it was, back in the mass-media age. Old media just assumed we were interested in what they told us to be interested in. But we weren’t. We’re proving that with every new choice the internet enables.

Yet special-interest magazines — community magazines, to put it another way — have a brighter prospect — if they understand how to enable that community.

When I spoke on a panel at the American Society of Magazine Editors sometime ago, the guy who invited me asked a favor: “If you’re going to say that magazines are doomed, Jeff, could you not come?” So I thought about it and decided that magazines aren’t doomed, not necessarily.

And mind you, this comes from someone who buys a fraction the number of the magazines I used to. That’s partly because I no longer have an expense account from a magazine-publishing employer, but also because I just found the issues piling up, unread, as only The New Yorker once did, a mountain of guilt in the corner. I love magazines. Hell, I started one. But I’m just too busy reading — or listening or watching — fresher, more focused, more personal, higher interest content on the internet. But some of that is still from or around magazines (see Business Week’s Blogspotting, for example). I still have a relationship with these brands, only not always in print anymore. And even when I do still read the magazine in print, I want a relationship with the magazine — and, more important, my fellow readers — online.

Magazines aren’t doomed if they can figure out that relationship. And it starts here: The editor of a magazine finds the good stuff and the people who make it. That attracts the rest of us, who like the same good stuff they like. That has always been the essence of the magazine value and brand. But now the internet makes it possible for me to find the good stuff my fellow readers have found. In that sense, magazines were the original collaborative filtering algorithm — only I couldn’t see the stuff my fellow readers liked. Now we can, thanks to the internet — if, that is, the magazine in the middle allows it.

The wise magazine will enable its community to speak among themselves. And it will also find ways to extract and share the wisdom of its crowd. This is true not just of magazines but of other, similar brands in other media (The New York Times, The Guardian, 60 Minutes, the Food Network, and most any trade publication. . .). I don’t want to know what the nation’s best-sellers are — the top books in the general-interest mass market. I want to know the best-selling and best-reviewed books among New Yorker or Times or Economist or Guardian readers. I want to know what EW’s community thinks of Borat. I want to see what Advertising Age’s crowd thinks of Time Magazine’s moves.

To gather a community together today and then not enable them to be a community is a waste or worse: It could be fatal to the brand.

I ran into a magazine circulation exec I respect not long ago and he lamented that too many magazines don’t update online nearly often enough with nearly enough good stuff. Others in his job would — and often do — say the opposite; they would fear that a robust internet site would cannibalize circulation. Not this guy; he’s smart. He said that without a strong online relationship with a magazine’s public, he has no opportunity to sell to them, to maintain and build the relationship and thus the brand and the business. Are the economics different online? Of course, they are. But so are the opportunities. At FourSquare, I heard Facebook founder Mark Zuckerburg talk about ways they’ve exploded the usage of the service among the same people. Magazines should think that way.

Some magazines — like fashion and design books — will continue in print. Some — like trade publications — will morph entirely online. But in all cases, they must enable their communities to join together online.

So what about Time? Does it have a community? I don’t think so, no more than NBC does or Warner Brothers. Well, somewhat more. But you get the point. What would I do with Time? Man, that’s a tough one. I hear the new boss, Rick Stengel, is a helluva good editor and when I met him at a panel, I was impressed. But it’s one tough job. Can Time become a collection of communities? Can it become a new kind of news service? Can it invent new, broad forms of networked journalism? Can it survive? We’ll see.

What Time did this week is just what TV Guide did more than a year ago when it cut its rate base and junk circulation and reduced its editions and changed its focus to online with new community enabling features like blogs. They can only hope it’s not too late.

: LATER: See friend Rex Hammock on b-to-b magazines’ lead over the masses:

As I’ve blogged here many times, the consumer magazine arena often claims “community” but rarely actually hosts or facilitates or even recognizes it. However, in the business-to-business media, you often find the leading publisher in a vertical will be the same company that puts on the largest seminars, conferences and conventions; collects and analyzes and packages the data; and, yes, even hosts the dominant space on the web in that category.

While B2B media companies may not “be there” yet, they are far ahead of consumer (mass) media companies in understanding community — or, as I’d refer to it in the business context — the marketplace of human beings who are buyers and human beings who are sellers.

Yes, and why shouldn’t there be New Yorker Meetups?

: Michael Parekh adds:

I have the same problem…love the magazines, but am seemingly unable to MAKE the time to attack the increasing pile in the corner on a regular basis.

Much in the same way that by RSS feeds pile up in the hundreds everyday in my blog reader, as do dozens upon dozens of podcasts in my iTunes and on my iPod.

Too much good stuff, way too little time.

Not necessarily an old media vs. new media problem.

Just a new problem for ALL media.

And one of the solutions to that is the link: taking in what your friends and editors tell you is the good stuff. That is a key value of the content community.