Saturday, January 31, 2009

What if we'd had the Internet in the 60s?

The recent rise in the use of the Internet by grassroots political organizations made me wonder what the 60s would have been like if we had all had Internet access. Would political discourse have been more reasoned and textual, rather than slogan-oriented and demonstration-based? Would the counter-culture have been more cerebral, and less laced with sex, drugs and rock 'n' roll? (I always thoughts that drugs and politics were a bad mix, because it gave the establishment the excuse to arrest you.)

These may seem like a frivolous questions, but I don't think they are. People can only express themselves using the media at their disposal, and we see extreme cases of this, where people sometimes resort to guns and bombs because they have no voice. (People resort to guns and bombs for other reasons, of course, e.g., because they can.) Even public demonstrations (I went on a few) are a rather blunt instrument when it comes to getting your point across.

If people feel they can make a difference without burning cars, occupying buildings, or simply shocking the bourgeoisie, then I suspect that many will choose less confrontation instead of more. Obviously, some folks enjoy taking to the streets, witness the WTO meetings of recent years, which have served as a magnet for protest groups of all kinds. But I like the fact that the new administration is leveraging technology to promote a more meaningful dialog than is possible across a police cordon.

Glenn Goldberg of McGraw Hill: SIAA Interview

McGraw Hill has 6 businesses in their Information and Media group: Aviation Week, TV Broadcasting (all ABC affiliates), Business Week, JD Power, Construction, and Platts (energy pricing). Glenn Goldberg is the President of this division. (Their other businesses are in the Education and Financial Services divisions, the latter being basically Standard and Poor's.)

JD Power serves global marketers with surveys (customer satisfaction, etc) and other information in a variety of industries, including: automotive, environmental/energy, and healthcare. Since McGraw acquired them some 4 years ago, they have also moved up the value chain by providing consulting, e.g., how do you launch brands. Surveys are also augmented by sentiment analysis these days, thanks to the recent acquisition of Umbria. This company's computer scientists scrape web sites, such as blogs, to do data mining on relevant postings and aggregate the results demographically.

My comments: These may sound like moderately robust businesses to be in, and revenues in I&M grew about 4% YOY 2007-2008, but increases in profitability seem to have come from restructuring, involving layoffs and reductions in incentive compensation. Meanwhile, Business Week joins the rest of the magazine industry in suffering somewhat from falling ad revenues, as well as the normal recessionary effects. BW is online, of course, but online ads don't compensate for the decline in print ads, since the margins are much lower.

Mr. Goldberg gave good advice when he exhorted information companies to create communities as well as content, curating other people's content for their customers to consume. He also advised aligning technology and business and generally holding people accountable, easy to say but surprisingly hard to do in many companies.

Interesting developments at McGraw Hill in recent years include the use of the AutoDesk web service to connect Construction customers with AutoCAD software, the growth of the Dodge network for aggregating and distributing information about building products, and Platts' continued expansion beyond its roots in petroleum markets to encompass other energy sources.

Wednesday, January 28, 2009

How to Monetize Social Media: SIIA Panel

Given these troubled times, it's not surprising that people are worrying about how to make money from nifty and cool things like social media platforms and video (see previous post). This panel featured John Blossom (Shore Communications), Joe Robinson (A Small World), Rob Barber (Environmental Data Resources), Chuck Shilling (Neilsen) and Shawn Gold (SocialApproach) as moderator.

The short story is that in order to make money you have to layer stuff like ads, surveys, virtual goods and services, games, etc. on top of social media platforms. We have all seen such things on Facebook, where groups, fan bases, and other coalitions drive 'word of mouth' marketing through memberships, testimonials, and iconography including badges and widgets. We are also seeing more e-commerce on sites like mySpace, where people sell CDs, T-shirts and jewelry.

Neilsen has a well-known 'listening platform' called BuzzMetrics that monitors mentions of brands, sentiment around them, and even proximity of competitor names to the brand names in text. EDR aggregates public environmental data from government sites such as EPA for people doing property due diligence and the like, allowing them to update the information. A Small World is a subscription portal for globe-trotters to share information and meet like-minded people, e.g., going to the same conference.

My own comments: Facebook is rumored to have 2008 revenues of around $250M, which sounds OK until you realize that they have significant expansion costs, and that adding customers probably isn't making them much money. They got about this amount from the Microsoft deal in 2007, but they're still smaller than mySpace and they're not cash positive yet, so they must be wondering where this year's growth is coming from.

Profiting from Video: SIIA Panel

This panel featured Sandy Malcom (, Andy Plesser (Beet.TV), Kathy Yates ( and Nicholas Ascheim (NYT) as moderator. I really enjoyed listening to this conversation, and took copious notes. The following summary captures the gist (I hope), but doesn't always attribute who said what, or who agreed with whom, and occasionally mixes in my own observations.

The Web is becoming more like TV, but estimates of the video ad market have always been overblown. In the summer of 2007, it was a little over $500M, about half of what had been predicted. Meanwhile, CNN is churning out 100 news clips a day, and niche players like Beet.TV and AllBusiness are building lower cost libraries of less perishable goods for much narrower audiences.

The CNN story is pretty instructive, I think. They started with online video in 2002, in partnership with Real Networks, and kept their product behind a pay wall. Then they made it free, except for live video, employing ads and cross-platform selling (presumably of their other service offerings). Now it's all free, including the live stuff, and bloggers, etc, are allowed to link in.

Beet.TV, meanwhile, makes 10 videos a week, mostly of tech gurus and academics who want to get on the small screen. Some, like Akamai and Adobe, want to reach out to customers. (Thomson Reuters has used Beet.TV to highlight its Open Calais service.) Others are probably building their personal brands and promoting their careers. This can be done at relatively low cost with webcams and Skype. AllBusiness spends about $250-$300 per 3-5 minute video, which includes the cost of a videographer and a production assistant.

Video search is still a wide open field, guided mostly by metadata tags, blog context and other cues. Ads can travel with a video, embedded in a branded player. YouTube (like Google) has adwords available to be associated with video content. And Google is making video more discoverable through its ordinary, universal search engine.

Bottom line is that YouTube is monetizing less than 5% of its clips, while even CNN must only be making a few thousand per clip in revenues, with production costs 10 times that of Beet.TV et al. Increased use of syndication may be part of the answer, in which ad revenues derived from product are split. (Thomson Reuters already does this in both directions.) In any event, the convergence of Web and TV is proceeding apace.

Henry Blodgett at SIIA: Online Journalism

Henry Blodgett is CEO of Silicon Valley Insider Inc., has a substantial background in financial services, and his book, The Wall Street Defense Manual, came out in 2007. His talk was on "The Rise of Online Journalism", and concentrated on how sites like Gawker Media and Huffington Post are competing with "old media", i.e., print newspapers who have gone online, with varying degrees of success. It was an entertaining and informative talk, which I attempt to summarize here.

New media isn't just old media put online - it's conversational (informal), interactive (you can talk back), 'snackable' (delivered in bite size chunks), real-time (as the story unfolds), and involves both serious aggregation of multiple sources and the kind of high-velocity production you associate with broadcasting rather than text. You float stories, get reactions, refine, correct, elaborate, and hopefully converge on the truth. It mixes video, images, text, audio, etc (a.k.a. omnimedia).

Some interesting facts. Gawker has multiple Tivos running at any given time, watching TV to find interesting clips. HuffPo aggregates stories from all over, and puts its own spin on them (usually political). Gawker now has 2 times the online traffic of the LA Times, while HuffPo has overtaken the Boston Globe in online page views. This despite Gawker haviung 80 editors to LA Times's 200; HuffPo has about 20 editors apparently.

What does it all mean? Mr. Blodgett claims that we are seeing "creative destruction" of old media leading to a better future. It's hard to be cheerful about destruction at the present time, but it's also hard to disagree that B2C information sources like traditional newspapers are in a difficult bind. If they embrace the Web, it's hard to build margin with online ads, but if they stay offline, or just give it away, they're in trouble anyway.

Wall Street Journal's hybrid model is held up as a good compromise. Unlike New York Times, they do charge a subscription for their online property (I have one), but they are also crawled by search engines like Google, and monetized by ads. Consumers still get quality journalism, but now their are multiple routes to consuming it. It remains to be seen how sustainable this is, or whether it works for everyone, but in the meantime newspapers (like our own Minneapolis Star Tribune) are struggling.

Software & Information Industry Association

The next several posts will attempt to summarize the talks and panels I enjoyed at the SIIA's Information Industry Summit in New York. In the interests of full disclosure, I should say that I am a member of the board of their Content Division, and that I was also on the steering committee for the conference. Nevertheless, I will try to be objective.

I have attended the Summit every year for the last 5 or so years, because I find it a very convenient way to keep up with what is happening in all corners of the content industry, and the software companies that serve that sector. It is also a pleasant social occasion, with plenty of opportunities for networking.

I thought that highlights of the meeting included Henry Blodgett's keynote this morning, panels on video and social media, and a technical briefing by Kris Hammond. These and other items will be summarized in subsequent postings. It may take a while for me to get it all up there, as I do have a day job!

Sunday, January 11, 2009

Google doing "semantic search"?

A posting on Facebook by Frank van Harmelen drew my attention to the fact that Google now attempts to perform a kind of question answering. E.g., if you type "capital Poland" into the search box, the first result is as follows:

Poland — Capital: Warsaw 52°13′N 21°02′E / 52.217, 21.033
According to

The answer appears to be a straight lift from the relevant table in Wikipedia. But there are other instances where the answer appears to have been extracted from running text (not always correctly). E.g., if you type "Mick Jagger wife" you get:

Mick Jagger — Spouse: Jerry Hall
According to - More sources »

which is wrong, since Jerry Hall is one of his ex-wives. Ms Hall and Bianca Jagger are both mentioned as such in the referenced article, although each is described as as "ex wife", i.e. without the hyphen. It may be significant that Jerry Hall is mentioned after Bianca Jagger, thereby filling the slot perhaps.

Not sure how this is done or where this is going, or how long it has been going on. The first search result has previously been used to present a definition (e.g., try simply typing "e" - you get the mathematical constant), but this is the first time I have noticed relationships being presented.