Posts about Business

Newspapers’ new boss: Google

Saul Hansell reports in The Times on Google’s test of a new advertising sales marketplace for newspapers.

Is it a good idea? Of course, it is. It is an idea the newspaper industry should have taken on itself 10, no 20 ago. It’s not just about the internet. It’s about finding ways to serve small local advertisers with self-serve sales and new locally focused products. It’s also about finding ways to bring together newspapers into national networks that can sell demographically targeted ads to new marketers. Oh, the industry tried with the doomed New Century Network but it failed because newspaper people are used to working in monopolies; they are not used to thinking like their customers or working together. And that is a major reason they are now in free fall. It’s not the internet’s fault. It’s their fault.

And turning over ad sales to Google — strengthening Google over their own brands, as Hansell’s story points out — only reveals the bankruptcy of their own strategies and soon businesses. Oh, if I were running a newspaper (fat chance), I’d probably sign on, too, because there’s little time and less choice. But it is only an indication of what Google can do and newspapers can’t.

Funny money

This morning’s New York Post speculates — in the wake of the YouTube deal — that Gawker Media is worth $400 million, CraigsList $250 million, and Digg.com $200 million. I can hear Nick Denton cackling with derision 20 blocks away. No offense to Nick, but I do think that CraigsList is worth more — except for the likelihood that anybody who’d buy it would ruin it (and the likelihood of it being bought looks quite slight). [I would give you a link to the Post story, by the way, but the page crashed my browser three times thanks to a damned ad or their damned overeager Flash.]

The giant stumbles

Wal-Mart quits Germany.

Bloomin’

Eat the Press’ Rachel Sklar harvests the grapevine with a report that the Onion is about to be bought by Viacom. Add to this Barry Diller looking for jokes at College Humor, she said. Add to that TV Guide buying Jump the Shark. Start something good and popular and you can be bought.

Bassackwards business

I constantly hear newspaper executives fret, “How am I going to get enough money to support my newsroom.” I did an interview about TV the other day and one of the questions was, “How are networks and producers going to get enough money to make the shows the make?”

In what business can you start your calculations with the bottom line you want to have: ‘I need to make this much money’? Doesn’t every sane business (that is new and hopeful or healthy and growing) start, instead, by saying, ‘This is my product, this is what customers are willing to pay in the marketplace, this is what it is worth, so that’s what I’ll make’?

That is the problem with threatened media businesses: They continue to concentrate on preserving their pasts, on the revenue they used to make as monopolies and megaliths in the age of big, and not on the products they create and the value they bring their customers in a new and competitive marketplace.

I wouldn’t bet stock on guys who look at their businesses from the wrong end.

I smell fear

Reading the agenda of the World Newspaper Congress in the Kremlin — the Kremlin! — in June, I sense foreboding. Some of the sessions:

Should newspapers welcome citizen journalists? … But what are the consequences for quality newspaper journalism? By inviting their public to participate, are newspapers harming their primary function or is citizen journalism a useful means of maintaining relationships with the “free generation?” …

One of the most pressing dilemmas newspapers face today is how to integrate audio, video and interactivity into their news production. Should print journalists be trained on multiple platforms? Or should newspapers join forces with other media companies to provide multimedia news? …

Web portals and news agencies: new threats to newspapers? New media mean new competition for newspapers. News aggregators lead readers to other sources and Internet companies produce original content. News agencies directly access the public though their websites, skipping the newspaper middleman. …

Lessons from the Mohammed cartoon clash… Six panelists will discuss if there are limits for press freedom and how media responsibility can work in a globalized world. …

Media credibility: should newspapers rewrite editorial guidelines?…

Not a club of happy campers, I’d say. That’s all from the forum, which seems focused on the newsroom. The congress — which seems focused on the business side — concentrates, more wisely, on innovation. I like the title of this talk by Carolyn McCall, chief exec of Guardian Newspapers (where — full disclosure — I write and will consult): “How Guardian Newspapers Limited changed everything except our values in just 12 months.” And I’d say some new values are fair game, too. And I’d say the editors should be concentrating on innovation as well.

A whole lot of monkey news

Having been sent into podcast orbit by the Guardian, Ricky Gervais is now planning to charge for his show via Audible. Hmmm. I enjoyed it but I’m not sure I’d buy.

Edgeio and the distributed world

I got a preview of Michael Arrington’s Edgeio — the classified system for the distributed future — and I think it is more important than it looks.

Edgeio as it stands is pretty simple: You tag a post on your blog “listing” and Edgeio will spot it and add it to its data base. You add more tags (e.g., “for rent” and “vacation”) and your post/ad will appear in the appropriate categories. Edgeio will allow you to come in and claim your blog to be able to get direct communication from respondents and, eventually, to upgrade your ad via typography and graphics and preference (I hope I got that right). This is just a start but it is a proof of concept of a new world. I’ve been waiting for someone to do this. Arrington has.

I’ve been writing for a long time that the future of classified advertising — and more of media — is distributed. That is, you won’t need to go to a centralized marketplace — the newspaper or even Craigslist or Monster — to let the world know you want to sell or buy or find something. Instead, you’ll be able to put your listing up anywhere with proper tags and then specialized search engines, like Edgeio and Oodle, will find them so buyer and seller can find each other in a distributed marketplace with far less friction and far more control at the edges.

Note well that Arrington is also setting the early standards for tagging ads so they can be found. I believe that he also needs to concentrate on putting data within ads, not just on top of them (e.g., “languages spoken = German, C++”) so more effective searches and matches can take place. Google Base may do this, but for it to be effective, the tags need to be open. What we’re really headed for is microformats and a structure in which people swarm around tags with efficiency so they and their stuff can be found. It works in Flickr and Del.icio.us and will certainly work in marketplaces where money matters.

As friction is taken out of the marketplace — as newspapers, Realtors, car dealers, eBay, and others who have controlled our information are undercut by free and open standards — there is a need to add value back into transactions. Craig Donato of Oodle — the other Craig, the one who will cause more change in the newspaper industry than the first one — is eloquent on this, pointing out that the marketplace still wants such things as anonymity to enable transactions and authority to vet ads and promotion to market them. Edgeio and Oodle — not to mention Indeed and Simply Hired and even eBay and many other comers — will try to add back some of these functions. I argued the other day that we will also need some physical-world functions, like concierges to handle house tours for far less than real-estate agents charge (cue defense wailing by Realtors here.)

: OK, but this is bigger than classifieds. It’s bigger in two ways:

: First, this is really about control. Realtors and multiple-listing services act as if they own our for-sale listings. But the truth is, that’s our information; it’s data we create and we own that we lend to these agents if they perform a service for us (or because they hold a monopoly on that service today).

I was talking about this with Seth Goldstein of AttentionTrust and Rootmarkets the other day: We own not just our attention data — what we look at, what we do, the things that Seth works in — but also have an even greater proprietary interest in the transactions we create. This holds if we are a prospect to buy a house and if we are selling a house.

The natural state of the marketplace should be that we control that information at the edges — buyer and seller — and that others join in that transaction only when and if they add value, such as the functions I listed just above. This will make for less friction and a more efficient marketplace.

It will also make for a lot of unemployed middlemen. The newspapers and Realtors that charged us too much for too little for too long will be knocked aside at the first opportunity.

: Second, this is also about content … and about people. Everything Edgeio does for classified ads, it — or someone — could do for, say, local restaurant reviews. Rather than relying on one restaurant critic for a paper to tell us what’s good and rather than trying to get all the diners out there to come to a centralized marketplace of reviews (see the late Abuzz et al), we should be able to write our reviews on our blogs, under our identities, and have them found with all the other reviews. That can occur thanks to tagging. This is what I hoped (incorrectly) that Dinnerbuzz would do, though I explained my wishes here.

It’s about people because identity matters: We want to know who is reviewing the restaurant or selling the house or seeeking the job. Verified identity and trust, I believe, will be the next huge frontier of business online. More on that later.

And it’s about people because such means of tagging and searching as Edgeio enables will also help people find each other. I wrote about this long ago, inspired by David Galbraith’s one-line-bio tag. See also Consumating.org, where people tag themselves.

See, this tagging thing is about more than bookmarks and coolness. They help reorganize the world and its relationships.

That’s why I say that Edgeio is a big deal, because it begins to enable this new world.

: A few of my posts are here, here, here, here, here, here, here, here, here, here, here, here….

: [DISCLOSURE: Michael Arrington and I are each aiding a startup. I gave him my two-cents about Edgeio. He once gave me a Techcrunch T-shirt. We link to each other. He held a spot for me at the lunch table at Web 2.0 And aren't these disclosure statements getting a bit ridiculous?]

: SPEAKING OF TECHCRUNCH: I see that Arrington will critique presentations by 10 companies at Supernova.

: LATER: Note good comments, including one from none other than Craig Newmark.