Friday, July 30, 2004

Cool eBook Gadget -- No Content!

Engineering driven companies just don't get content. At Gizmodo.com, this week's Feature Creep: 500 Books in Your Gadget Bag provides an excellent insight into the disconnect between hardware designers, content publishers and readers (the all important buyers!) that has plagued the ebook industry. Sharp is showing a prototype color eBook reader, which looks really cool, along the line of Apple products. Earlier this year, the Sony Librie reader was introduced. Technically, both look attractive with better screen resolution and battery life than the SoftBook / RocketBook readers that I worked with several years ago.

But here is the kicker. The publishing industry produces over 60,000 new titles per year, with well over a million titles in print. But for eBooks, Sharp is touting the availability of only 7,000 titles for their new devices available in 2007, which presumably use the same format as their handheld Zaurus. Even worse, Sony had only a skimpy 400 titles available at launch.

Now this might be quasi-attractive if I could put self-published ebooks, purchases from online eBook stores, and my mountain of Adobe PDF reports on the device...but alas, only proprietary DRM protected commercial books are allowed! To make matters worse, the books expire at the end of 60 days on the Sony DRM model, presumably after having paid full retail price. Presumably, if the content included periodicals, the 60 day period might make some sense, but this approach for books doesn't allow me to pile up interesting reading material to be browsed sometime in the next year. This approach really doesn't work for libraries, who have been early adopters of ebooks.

Maybe someday designing engineers will also be readers, and a good device with a good business model will emerge, but for now the PDA and PC remain the reader devices of choice....functional, if not cool.

Headlines for 30 July 2004

Blogsploitation: Big Media Try to Steal Bloggers' Thunder at DNC
Real fires back at Apple in DRM dogfight
BBC tunes in to a digital future
MIT/Cornell Summarizer Gets the Idea
Finding the Invisible Web
Getting More from Your Content Management System
Google Thyself - How Search Engines are Impacting Reputation Management
AuthentiDate and Canada Post Partner to Create Universal Electronic Postmark for Content Authenticity
Westlaw Wins Law Office Computing Readers' Choice Awards for Eighth Consecutive Year
Imaging Services Corporation adds HexaLock CD-ROM and CD-RX Copy Protection Solutions

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Online Buying Guides & Two-Tier Search

A fascinating new report from Nielsen/NetRatings is claiming the unthinkable: that the major search engines are running out of affordable ad inventory, with demand far outstripping supply. Whoda thunk we could have reached that point so quickly?

The core issue is this: the search engine model is to bid on keywords, and though Google is proliferating through to thousands of other Web sites via its AdWords program, an advertiser who buys a single keyword will appear on all relevant Web sites. There's no further selection or targeting capability, and that limits supply. There may be an infinite number of words, but there are apparently a very finite number of words people are willing to pay to be associated with, and a limit to how much they are willing to pay to be associated with them.

Since these keyword programs are priced using an auction model, with the search engine making its money based on the number of click-throughs, it could be that the big search engines have painted themselves into a corner, albeit a profitable one. That's because the current scenario will mean advertisers will have to pay increasing amounts to maintain the same level of visibility. At the same time, however, it doesn't appear to be in the interest of the search engines to create more targeting options for advertisers, since they make more money for a lot less work in the current model. Indeed, prices could potentially drop if the search engines created more targeting options, since that would effectively create more inventory.

The other fascinating trend is the rapid growth of software products and service firms dedicated to managing paid search programs, and they all seem to be flourishing, given the inherent complexity of the auction process, and the real need to constantly tweak both keywords and bids to achieve maximum results without paying too much. There really is no precedent for such a high level of involvement by advertisers in overseeing their own advertising programs. As one example, Overture has just released an application called Search Optimizer that sits on top of its existing Marketing Console application, and is designed to ease management of large numbers of keywords. Rather than offering the product free to big customers to mitigate the complexity of its own system, Overture is reportedly charging an average of $500 per month for this service. Ouch.

Put together these two things: increased costs and increased complexity, and what do you get? Advertiser backlash. No, we don't think paid search is going to collapse. Indeed, the Nielsen/NetRating reports suggests to advertisers that for now the results are still worth the cost and the hassle. But with affordable keyword inventory drying up, some advertisers may be forced out of the paid search market.

What's it all mean? We think the stage is being set for a prediction we first made a year ago: a two-tier search market, with B2B buying guides purchasing keywords to drive traffic to their sites, and then selling space on their sites to advertisers, effectively reselling the keywords.

Why will this happen? As popular keywords become increasingly expensive, among the few who can afford the cost will be those who directly or indirectly are reselling them. Further, in this two-tier arrangement, advertisers get the benefits of keyword marketing without the oversight hassles, and effectively share the cost. The publisher then assumes the role of buying the proper keywords, managing the program and paying for it, while the advertiser goes back to the traditional and far easier role of simply writing a check.

Another great benefit to this approach, one that publishers and advertisers are just beginning to recognize, is that visitors that come to them this way are in effect "triple filtered." It's highly unlikely that someone who clicks on a keyword driven contextual ad, then visits a vertical B2B site, then clicks on an individual advertiser link is doing so accidentally. That means better quality clicks, and more value to the advertiser.

We've long maintained that the big search engines couldn't succeed by trying to be all things to all people, but we admit we never anticipated that they would become victims of their own success.



Thursday, July 29, 2004

Headlines for 29 July 2004

Bloggers: The new media or a fad?
Apple to play fair with FairPlay?
To Fix or Not to Fix: Online Corrections Policies Vary Widely
ERP and Content Management: Harmonic Convergence?
Terra Lycos finds buyer for US unit
Prince slams record labels
Dow Jones & Company and Meximerica's Rumbo to Publish Wall Street Journal Section
Digimarc Licenses Patents to Verimatrix for Forensic Tracking, Copy Protection Applications
Deep Web Technologies Recipient of Phase II SBIR Grant Award from the U.S. Department of Energy
LexisNexis Martindale-Hubbell's Lawyers.com Web Site Wins 2004 Model of Excellence Award

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Political Webloggers at Conventions: Anti-Media for Non-Events?

The Seattle Post-Intelligencer covers along with most of the media outlets the arrival of press-credentialed webloggers at this week's Democratic National Convention. The P-I along with others compare this to the advent of other media into the mainstream of news, but it seems to be a weak comparison at best. "Official" bloggers are very low on the reporting totem pole at this television-tailored non-event designed not for niche audiences but for the masses that tune in to hear what amounts to a video weblog from the speakers at the podium. To that end many webloggers are watching on television and the Web from home and commenting or compiling media coverage from there (great example at Wonkette), which for all of the non-drama that the convention offers is probably just as valid a form of coverage for this kind of event as trolling through second-tier buffets away from the rainmakers at the convention itself. Probably more significant is the P-I's noting that many delegates on the floor of the convention itself are offering their insights in weblogs - the kind of participant journalism that seems to be well-suited for webloggers covering events. Weblogging's power is not as much in displacing traditional journalism as it is in provding a story told plainly from the front lines of events by people who have real-life credentials that traditional journalists cannot replicate.

30 July Update: Do check out USC Annenberg Online Journalism Review's excellent summary of weblog coverage of the Democratic National Convention, including the efforts of mainstream media outlets to have their own "star" journalists and co-opted webloggers add depth to the affairs. To some degree I think that it underlines my original point, but it also adds in what mainstream journalists COULD be doing if they so chose in addition to traditional pieces - when they're not trying to be tragically hip...

Wednesday, July 28, 2004

Headlines for 28 July 2004

WSJ Online Offers RSS Feeds to Readers
Microsoft gives MSN TV Web Access a Savvy Face-lift
Time Warner Raises Outlook After Strong Revenue Gains
Some Online Music Providers Allow Sharing
Overture tool broadens ad analysis
HP Use OneSource Business Information Solution To Improve Productivity
U.S. Venture Capital Activity Climbs in Second Quarter
Kasenna(R) Enables Secure Broadband On-Deman Delivery of First-Run Digital Movie Content
Client Dynamics-Powered 'Dow Jones Wealth Manager' Earns Industry Accolades
SLA Establishes Australia and New Zealand Chapter

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Time Warner's Rosy Earnings Mask Continuing AOL and Publishing Weakness; Reuters Crossing Fingers for Profits

Dow Jones News reports along with others on the rosy earnings report from Time Warner, which reported strong revenue growth in entertainment and cable operations. Cable growth was largely based on Internet access, though, while subscribers continue to drop off of AOL and reduce subscription incomes; ad revenues allowed AOL to post a modest 2.1 percent revenue gain, while ads also buoyed publishing revenues 3.5 percent. In other words except for movies and ad-driven revenues there's stil core weakness this premium content provider's domain. Combine this with the recent Reuters earnings report that is only moderately hopeful that successful cost-cutting can keep ahead of continiung softness in their core financial sector revenues enough to post some black ink this year and you don't get a happy picture in general for premium content outside of ad revenues. Lots of tea leaves to interpret here, but bottom line is that premium content providers have to continue to become much more adept at leveraging the value of contextual content. Effective workflow has been one leading option to date beyond ads, but there's far more that needs to be done to get premium content on the track to long-term health.

Inbox Report: Wall Street Journal Online Launches RSS Feeds

Just a few months ago at an event in San Francisco reps from Dow Jones News were sniffing at the idea of RSS as a serious news medium; how things change when one listens to their readers. The WSJ Online crew has announced in emails to its readers the availablility of a headlines-only feed to its readers. The FAQ page for this new service is careful to mention that it's only for the use of individual readers and to restate the applicability of license terms and offers a full range of headlines, essentially equivalent to its email service with similar link-backs. This is still far from a full-blown commitment to RSS as a news distribution medium, but it is at least a tentative step in the right direction towards this concept. With a little rights managment thrown onto this capability the Journal and other major outlets can enter the world of peer-driven news object distribution fairly easily. In time, of course.

Tuesday, July 27, 2004

Demographic Data Fair Game for Personalization - But Is it Really Used that Way?

A newly announced study by content personalization vendor ChoiceStream indicate that a 64 percent of Internet users would provide preference insights in exchange for personalized product and content recommendations and 56 percent would provide demographic data such as age and gender as a part of that collection. It's a vendor study so I take out my grain of salt accordingly, but it's a pretty strong indication that people understand the value of allowing content services to serve them better according to their interests. What's notable is that this compliance is for personalization and not general access. The flourishing of "to serve you better" registration requirements for many news sites does little to return value of any kind to the person submitting to these proliferating and redundant requests. If you're promising to serve people better then follow through on your promises with more than marketing materials: build your responsiveness into your services.

Headlines for 27 July 2004

Online Ad Dollars Set to Match, Then Go Ahead of Magazines'
Google IPO ready to go
Oxford to Move Journal to Full Open Access
MSN Launches Newsbot in U.S.
AP Looks Into Enhanced Online Search Tool
Reuters Tops Profit Views But Cautious
Patriot Act Used to Enforce Copyright Law?
FindLaw Acquires Hubbard One
FT Interactive Data Introduces SIRS Intra-Day; SIRS is No Longer Just an End-of-Day Service
Interwoven Chosen Winner for Document Management Category by Law Office Computing Magazine Readers

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Monday, July 26, 2004

News Analysis - The Joy of DOI: Publishers Start to Get Serious About Persistent Online Content

The Digital Object Identifier (DOI) System that allows commercial publishers to provide persistent links and metadata for published online content is starting to gain some steam in recent weeks as commercial publishers begin to focus on how to adapt this scheme to more of their product lines. DOI promises to offer a world in which content not only doesn't disappear but also can provide a changing array of services when users go looking for these persistent identifiers. Great tools, but what will it take to get DOIs rolling along for a broader array of content? Opportunities abound, but the exploitation of them remains stuck in the limited focus of DOI efforts to date.

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Headlines for 26 July 2004

Blog's the word in big business
Microsoft Puts Slate Online Magazine Up for Sale
Bloggers go mainstream at US conventions
Free For All: UK STM Committee Report Calls For Broad Change
SEC to Assess XBRL for Supplemental Filings
Real 'frees' Apple's iPod player
Verity and Proxicom Join Forces to Develop Portal for the Healthcare and Life Sciences Markets
Survey: Majority of Internet Users Willing to Exchange Demographic and Preference Info for Personalization
Equinix Introduces First Traffic Exchange Portal; Announces New Customers
HyperFeed's HTPX Ticker Plant Platform Selected by Susquehanna

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Friday, July 23, 2004

May the Web Be With You: The Migration from Print is Not so Simple

A recent article by Alan Meckler, (if you download the article, go to page 16 of the PDF) the well-regarded Internet visionary and founder of Jupitermedia, makes a case that, as the headline of his article puts it, "time is running out for tech titles tied to print." Meckler posits that the imminent demise of those print technology magazines is driven by the better ROI advertisers can achieve on the Web. Why can the Web offer better ROI? Because, according to Meckler, vertically-focused Web sites "offer the advertiser an opportunity to rifle-shot his ad to an absolutely focused reader," because a Web site is cheaper to produce than a magazine is to publish, because "a new Web site only requires one writer to start," and because "its distribution cost is virtually zero."

While Meckler makes a compelling case for the rapid demise of print (with the pace varying by markets), it's important to recognize that advertiser excitement about the Web is based more on what we ought to be able to do than what in most cases we actually deliver. It's also worth noting that many of the characteristics of the Web that make it so attractive to publishers also create problems for publishers, and as the Web matures, some of its advantages will disappear. Here are some thoughts on those Web advantages identified by Meckler in his article:

Most print B2B publishers owe their existence to the fact that they have for decades offered their advertisers the opportunity to rifle-shot their ads to a group of absolutely focused readers. Given that, I am hard pressed to see the advantage of Web advertising, unless Web sites are delivering a higher quality or better targeted audience. I would contend, however, that most publishers are currently delivering neither. Most B2B Web sites attract online audiences two to ten times as large as their print audiences. Only a few people question how this can be. Were so many print publishers missing so much of their market for so long, or are all these new online readers marginal if not spurious? Nobody knows, just as very few Web sites have even the most basic sense of who is visiting their sites. I've looked at enough publisher log files and online registration databases to know just how much we don't know about our online audiences. Yes, you can target an audience of one with a Web site, but it's a fruitless exercise unless you confidently know who you are targeting. Contextual advertising is another powerful online advertising tool, one that doesn't require any knowledge of the visitor's identity, but unfortunately most of this revenue is flowing to the search engines, not the publishing industry.

That Web sites are cheaper and faster to launch than print magazines is a two-edged sword. Just as you can compete more easily on the Web, so can others compete against you. Business-oriented Web sites that accept advertising are everywhere on the Web. Most offer little value to advertisers, some are borderline frauds, but they're all clamoring for the same advertising dollar. The result is advertiser confusion, hesitation, and downward pressure on advertising prices. The well-known saying that, "on the Internet, nobody knows you're a dog" goes to the heart of the problem. On the Web, start-ups look just like 100-year old multi-nationals. It's hard to tell who has substance and who will deliver results. So how do you distinguish yourself as a serious publisher?

Ironically, the answer may well be with a companion print product that can reach the not insubstantial segment of the market that prefers print. That's presumably why TechTarget, an online tech publisher Meckler cites in his article, launched print magazines well after it had become successful on the Web. The key is to lead with your Web product, not your print product, and possibly even position the print product as a premium-price supplement to the online product. The technology is just about ready to handle some serious innovation in this area.

As to the ability to launch a Web site with a single writer, I see an apples-to-oranges comparison here. Those who write for the Web aren't inherently more productive than those who write for print, so if your Web site has fewer writers, your Web site will also have fewer stories. If Meckler is suggesting that you can bootstrap a Web launch with modest content, adding more and better content if the site proves itself financially, I believe that the window to operate this way is rapidly closing. The fight for audience mindshare is more intense than I have ever seen, and if your target audience barely has time to read top-notch content, imagine their interest in perusing second-rate content.

I'd make a similar observation on the notion of the Web having virtually zero distribution costs, a technically accurate statement if you are trying to contrast paper and printing costs with Web pages. Yet the reason Web distribution is virtually free is that those who want your information need to come and pick it up, and therein are some serious costs. Search engine optimization and marketing represent substantial and growing costs for many publishers, who spend this money because they understand that, just as in print, you need to find your audience. Only then do the wonderful economics of Web publishing kick in.

Print publications have survived predictions of their imminent demise for nearly 20 years. That said, this time I think it's serious. What's different now is the widespread, fundamental shift in the way users access, read and use information. The future is clearly about speed, the ability to apply information, convenience and personalization. None of those are strengths of print. So Meckler's points should be heeded, but it should also be noted that the online medium still has a way to go to prove itself as an effective advertising vehicle, and that the transition from print to online publishing is neither easy nor automatic.

Headlines for 23 July 2004

Users Sidestep Required Logins For Content Sites
Report on Sept. 11 finds home on Net
Open Arms for Open-Source News
RSS Gains Traction as More Publishers Offer Feeds
Blogging: A world stuck on itself
$5 Million Gift to Harvard Supports Open Collections
When a graphic is worth a thousand words in site search results
Interview with Jenna Freedman on anarchist and zine librarians
ePocrates Introduces 'Essentials' Mobile Clinical Reference Suite
Loudeye Announces 16 New Customer Contracts in Its Overpeer Piracy Protection Business

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Thursday, July 22, 2004

Headlines for 22 July 2004

Array of New Rivals For Ad Dollars Slows Comeback of Print
Copyright Bill to Kill Tech?
Thirteen Ways of Looking at...Digital Preservation
EMC Blending Content, Storage
Consumers Want Personalized Content
Allscripts & Wolters Kluwer Health Sign e-Prescribing and Content Distribution Agreement
McGraw-Hill Professional Applies Digital Object Identifiers (DOIs) to AccessScience Content
LexisNexis Launches New Search Capabilities for BlackBerry
Entire Collection of MarketResearch.com Reports Now Available Through Factiva
DepoNet Debuts a Free Web Site Linking Program for Professional Legal Associations and Organizations

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Wednesday, July 21, 2004

Inbox Report: LexisNexis Adds Search to BlackBerry Interface

An email press release from LexisNexis announces the addition of simplified search capabilities for LexisNexis content from Blackberry devices (product page), along with in-place access to content alerts via the LexisNexis Publisher service. Needless to say a handy move, but it begs the point of how people are using content today in professional circles. With so many devices and collaborative schemes using those devices, being able to store premium content from services such as LexisNexis locally and onpass it to colleagues is becoming a more key factor in ensuring productivity. Kudos for the interface, but hoping to see some more sophisticated developments in using increasingly mobile and contexual user devices with increasingly mobile and contextual content distribution.

Mailbox Report: Blockbuster Fights Downloads and Subscriptions with...Subscriptions?

A mosey out to the mailbox just now yielded a flier from Blockbuster announcing unlimited film "rentals" for $24.99 a month (first month at $14.99) - AKA subscription movie content. Fighting both premium and on-demand cable and a surging market for movie downloads, Blockbuster has little choice but to try something new, and all-you-can eat subscriptions may be just the trick. Subscriptions are still a very valuable business model, and it may be just the thing to help other media sectors whose unit sales have been suffering. Part of the trick is to have "point of sale" capabilities within the model to add margins - be it a chocolate bar, a DVD or a $250 dollar report, depending on your content and your needs. This is where contextual advertising offers a wealth of possibilities for premium content that have barely been exploited.

Microsoft Stock Buyback: Pay Other Companies to Build a Good Idea - That You Can Buy?

My first impulse was to be underwhelmed by the recent Microsoft announcement that they are planning to buy back some $32 billion of its stock over the next four years and provide extraordinary dividends to shareholders (total package about $75 billion), but perhaps it's because I've heard this song before. Was it not long ago that then-Reuters CEO Peter Job announced returning millions of its "cash mountain" to shareholders who rightly deserved it? Some four years later Reuters no doubt would have yearned to have some of that buffer available in its lean times as it suffered through being unable to buy a clue as to how to attack the content marketplace effectively. Reuters may have come through that period a better and more efficient company for the trouble, but it was hardly the result of feeding shareholders with monies that could have gone to product investment. Microsoft is essentially admitting to middle age and an inability to provide effective earnings per share in its current diluted state. The move will do much to prop up per-share earnings in these leaner times, but does little to restore any hint of growth luster to the stock. In the meantime, much of that $75 billion may go from investors' hands into other companies that may have more innovative ideas as to how to attack content technologies. Companies which in turn Microsoft may buy in time, I imagine. Hmmm, if you can't buy a clue, why not pay people to find one for you...?

SLA Takes on Competitive Intelligence: Competition SCIPping a Beat?

The Special Libraries Association (SLA) has announced the formation of a new Competitive Intelligence Division, a special interest group that will be aimed at the same audience of the unaffiliated Society of Competitive Intelligence Professionals (SCIP). The street wisdom these days seems to be that SCIP has lost some of its energy, which is ironic, since content tools for providing better competitive intelligence capaiblities have been improving dramatically over the past few years. Some of the answer may come from organizational challenges in their membership base: like their corporate library bretheren, CI staffs oftentimes are finding themselves becoming more part of the content technology infrastructure support world, helping to design portals and to integrate in content sources from both internal and external suppliers to solve competitive intelligence needs within the context of broader content solutions. In this sense the SLA moves makes a lot of sense, as info pros find themselves wearing many different kinds of hats these days, including and certainly not limited to competitive intelligence. SCIP can be expected to survive for now, but the merging disciplines of managing content in today's institutions are making it more difficult to look at these disciplines in isolation any more. While that may be bad news for many specialist associations, it's probably better for people trying to come together to solve the increasingly complex issues of today's content universe.

Headlines for 21 July 2004

Growth of Web Use in China Slows
Group calls for copy protection Rosetta stone
Checklist for Building the Ideal News Web Site
Google-envy and the Quest for Local Search
JISC, Gale negotiates free electronic reference data for UK colleges
Jane’s Information Group Selects Verity K2 Catalog
Information and Intelligence Leaders Aviation Week Group and Forecast International Form Partnership
Factiva Appoints Intermark as Sales Agent in India for Sales to Domestic Organizations
SLA Creates New Competitive Intelligence Division to Attract CI Professionals Worldwide
IBM Partners with AtHoc to Extend Upcoming DB2 Information Integrator Enterprise Search Capabilities

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Tuesday, July 20, 2004

iPod Goes to School: Duke University Encourages Experimentation with Academic Content

Apple's iPod is of course popular amongst college-age young adults for its entertainment capabilities, but in the broader scheme of things it's a processor with an operating system, rights managment and storage. No wonder Duke University has announced that this popular platform has been selected for a major experiment in providing administrative and academic content to incoming students this fall, including content typically distributed on CD-ROMs and DVDs. The ability of devices like iPods and Microsoft's new Portable Media Center to manage rights-protected content from any number of sources on a platform that individuals can use in any number of professional or personal environments places yet more emphasis on content providers having strategies that are oriented towards delivering useful content objects to multiple platform environments. As noted on today's New York Times (REGISTRATION), there are also numerous chubby multifunctional handhelds developing out of mobile phones and PDAs that are competing for more content than ever before. Platform profligation adds many wrinkles to the "workflow" approach to content integration, wrinkles that are likely to make it increasingly difficult for the content providers themselves to enable workflow solutions cost-effectively across a wide range of content presentations. Best to make sure that your content object strategy is solid before hanging you hat on software solutions that may be left behind as platforms of choice change rapidly.

Headlines for 20 July 2004

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Monday, July 19, 2004

Headlines for 19 July 2004

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News Analysis - Weed Feed: How Models for Success in Premium Content are Blending Old and New Concepts

With many sources of content revenue at a crossroads some content providers are putting the brakes on free access and throwing up registration or purchase barriers to usage - even when these methods seem to be out of step with how people are using and distributing content. As evidenced by Weed, a rights-management scheme that helps to monetize music content with the cooperation of individuals, there's a lot of room for blending in old models of usage with new technology capabilities without alienating new audiences eager to access quality content. You need not give up established channels to go to blending - just think creatively about how people really use content today.
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Friday, July 16, 2004

In Premium Weblogs: Smith Barney, Others Finalizing Indy Research Choices, SEC Nods for Hedge Fund Registration

In our premium Finance weblog Shore Senior Analyst Jack McConville sifts through the choices that the major brokerage houses have made for independent research providers as the July 25th deadline looms and goes through the SEC's ruling that hedge funds are going to have to register as investment advisors.
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Headlines for 16 July 2004

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Sizing Up Seisint: LexisNexis Opts for Content Analysis

In a major move, Reed-Elsevier has acquired Florida-based Seisint for $775 million in cash, nearly seven times Seisint's estimated 2004 revenues. What does Seisint have that Reed-Elsevier wants so badly?

In short, the answer is software that can sift through massive amounts of data at high speeds -- processing billions of records at sub-second speeds, according to company literature -- and most importantly of all, the ability to relate data from disparate datasets.

In addition to software, Seisint has also built its own database, comprised primarily of public record databases and commercially available databases such as telephone white pages directories. Seisint clients can use its technology to mine their internal databases, Seisint's database, or a blend of the two.

Though Seisint was originally founded to help large corporations to better leverage their own internal data, Seisint found a ready market for its offerings in the law enforcement market, and is also a big player in the burgeoning homeland security market. Indeed, Seisint provided the impetus for a controversial program called Matrix, where individual states are combining police and other records with commercial and public record databases, all powered by Seisint technology.

Rather than making the mistake of offering itself as a raw capability in search of problems to solve, Seisint has been clever in packaging market-specific applications of its technology and data. Just two examples: SECURINT (a employee background screening service) and SMARTINJURY (background information on potential jurors for use by attorneys), show why Reed-Elsevier was so attracted to Seisint, and why it is such a glove-fit with Reed's Lexis-Nexis unit. Not only is Lexis-Nexis active in this area already through its Risk Management group, but Lexis-Nexis has the potential to vastly expand the amount of data available to Seisint software to analyze, making Seisint products more powerful, while opening up a wide array of new business opportunities for Lexis-Nexis. It's been suggested that Seisint will nearly double Lexis-Nexis Risk Management group revenues.

Overall, we see this acquisition as a brilliant one for Reed-Elsevier. Don't mind the multiple: Reed has paid seemingly sky-high prices for acquisitions in the past and more than once had the last laugh. The only potential cloud on the horizon is the issue of privacy, as Reed through Lexis-Nexis becomes a prime player in the personal information content space. Of course, this could become an issue for Lexis-Nexis even without Seisint, since Lexis-Nexis was independently moving into this area with a host of new background screening and PATRIOT Act-related product offerings.

Most importantly, this acquisition is a huge acknowledgement by Reed-Elsevier that future success lies not simply in amassing ever-larger pools of data, but making that data more accessible, understandable and usable. This is one of the largest dollar commitments to infocommerce that we've seen to date.

Wednesday, July 14, 2004

Pricing for Archival News: The New York Times Strategy vs. Search Engines

Shore's headlines today include a story in Wired News titled Searching for The New York Times. The article by Adam Penenberg, an assistant professor at New York University, cogently makes some points that we've been harping on at Shore regarding the appropriate business model for general news content. In short, publishers of general news information do best when they maximize their circulation, so that they can charge a premium price to their advertisers--for both display and classified ads. Today, the model applies in online as well as print, due to the growth of online advertising (and online readers of news). In fact, advertising revenue for NY Times Digital is up 39.8% year-to-date. So, why does The NY Times put archival content behind a firewall and charge $3.00 per story? Certainly, this policy doesn't maximize the number of readers of archival stories; quite the opposite. And, the revenue earned is minimal--just 2-3 % of annual profit for the division. Penenberg posits that the reason lies in the long-time deal between The NY Times and Lexis-Nexis for which The NY Times receives $20 million per year. He states that the NY Times "simply can't charge Lexis-Nexis tens of millions of dollars while giving away the same content free over the Web". In Shore's opinion, the current situation is untenable, but not without possible solutions. Lexis-Nexis, part of the Reed-Elsevier empire, is already moving away from being a passive repository of content toward an approach that focuses on providing content-driven solutions to clients. Over time, providing hosted access to an archival collection of all Times' stories may not be as important to Lexis-Nexis. If The NY Times resists sensible pricing and packaging policies for its archival collection because of its current relationship with Lexis-Nexis, it may well find that it has missed out on building long-term growth opportunities for monetizing its digital archive through Web search and advertising, and that the relationship it has been protecting is ready for a break-up.

Headlines for 14 July 2004

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Tuesday, July 13, 2004

Apple Trying to Lock Up Indie Music Labels for Europe: Platform as Channel

VNUNet reports along with others that Apple will likely wrestle down a deal with independent music labels for distribution via iPods by the end of the week, with concerns about fixed-price shares a major stumbling block to be addressed. Not really hugely important as an industry-moving event, but significant in its own way as the iPod platform continues to gain leverage over competitive platforms for breadth of catalog coverage. It's funny to think what a Sony might have been able to do if it had been more foresightful with its own technology and music catalog capabilities: as popular as the iPod has become it is a clear descendent of the Walkman school of portable gizmos, a gap that Sony is only now beginning to fill (see Register article). More than many other leading technology companies Apple seems to "get" that technology platform providers, be it hardware, software or some useful combination, are becoming content channels in and of themselves, inspring more loyalty than any major record label could hope to engender. As in enterprise content, people who consume entertainment content are now largely distributor-agnostic, knowing that it's largely immaterial to the quality of the product that they consume. Will there come a day when major acts sign with Apple instead of a major record label? Or will a Verity or an Autonomy begin to market professional content directly to its institutional client bases? Stranger things have happened.

People Versus Users: Where Technology Usually Fails Content and its Audiences

eWeek reports on a visit to Microsoft's Center for Information Work, described by Microsoft as "a companywide effort to build a prototype of what productivity technology could look like three to five years from now." This is essentially the same facility seen in company videos earlier this year, with ZDNet allowed an on-the-record look at the test bed in person. I found some of the insights in the article very telling, particularly this choice tidbit near the end of the article: "Microsoft is very good at understanding software, but not so good at understanding people and human behavior (as opposed to user behavior, which they study extensively). CIW shows us a future in which computers do their thing almost without consideration of the problems that would cause to their supposed masters - the users." It's a key factor to consider when looking at I.T. versus vContent: in I.T., humans are "users", machine operators, annoying presences that need to understand the brilliance of the machine before them. In vContent, the presence of people is the primary value creation point, with all other factors working from human needs into a solution that meets those needs in not just mechanical terms but in all of the complexities that make up human value systems. This is what so many technology and content companies miss in trying to meet the needs of today's sophisticated content audiences - and why so many "rogue" products succeed when they simply listen carefully to what it is that people really value. Simple lesson, but simple doesn't always mean easy...

Headlines for 13 July 2004

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Monday, July 12, 2004

Headlines for 12 July 2004

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New ShoreViews Report - Online Channel Partner Handbook: Strategies and Practical Tips for Professional Publishing


The control of content production and distribution is moving away from aggregators and traditional distribution partners and back toward publishers, changing the economics of partnering for online content distribution. Shore Senior Analyst
Janice McCallum
offers up key strategies and practical guidelines for publishers of all kinds to adopt in this environment in the first of our ShoreViews series of reports, reports designed to provide you with topical and highly usable "consultant in a box" expertise that will aid your decision-making process and complement our Private Advisory Services capabilities. This Handbook contains essential guidelines, checklists, and models for deciding between channel relationships and direct sales outlets in this challenging sales environment.
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News Analysis - Merchandizing Content: How Endeca Applies eCommerce Lessons to Enterprise Content

Contextualizing catalog content has been a key factor for success in online stores, a capability that Endeca has refined to a "T" and now uses to focus on getting the most out of enterprise content. Instead of perusing toys or wine bottles the enterprise user finds Endeca's Guided Navigation a very valuable tool that allows content browsing from multiple facets - and finding lots of useful contextual content in the process. Content providers of all kinds need to think carefully about how merchandizing concepts that have been so valuable in ecommerce can pump up content usage by users who value ecommerce methods in their daily lives.
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Friday, July 9, 2004

In Premium Weblogs: TradeWeb Volume Record, Hedge Funds in SEC Spotlight

Shore Senior Analyst Jack McConville reports on TradeWeb's leap in fixed income trading volume and the upcoming examination of hedge funds management by the SEC.
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Consolidation in Web-Based Directory Assistance

This week W3 Data, Inc. announced its acquisition of 411.com, an online directory compiled primarily from phone directory listings. W3 Data has a consumer division and a business division. It's consumer division, which is branded by the WhitePages.com name for its network of directory assistance search sites, competes with Switchboard.com, SuperPages.com, and other RBOC-owned directory sites. In this sector, there's a lot of collaboration with competitors, especially when it comes to source data. In general, it makes sense for the phone companies to license their white page and yellow page data to third parties like W3 Data, because of their Web development expertise and ability to concentrate on delivering a better, cheaper, and more efficient service to consumer and business customers; whereas the phone companies have their core telecom businesses eating up most of their time and efforts. W3 Data is a good example of how a company can create vContent by combining technology and strategic business understanding to provide an enhanced content-based service to its customers--which goes far beyond just offering access to content.

Thursday, July 8, 2004

Federal U.S. Court Rules in Favor of Fact Extraction from Web Sites

Mondaq covers a ruling from a Federal U.S. court in Florida on the Nautical Solutions Marketing, Inc., v. Boats.com case in favor of the defendent NSM. NSM was mining data from yacht listings on the Boats.com site Yachtworld.com, storing in its own database and then presenting in their own unique listing formats. Key to the decision was the fact that the listings being scraped by NSM were posted by the yacht owners and therefore not the unique creation of Boats.com, as well as the fact that the scraping visit was instantaneous and did not harm the performance of the Yachtworld.com site in any significant way, unlike some mining operations that have been known to suck off not just data but server performance. So the concept of fair use of facts is alive and well in the courts, if not in the minds and hearts of many database providers who are stuggling to define lines of use and utility in the era of vContent. One wonders where the lines will be drawn for providers of high-performance services such as exchange ticker feeds in light of this ruling: does a securities exchange or a content vendor have the right to challenge content redistribution of stock quotes and other trading data provided by the financial institutions seeking a trade? It will be interesting to see where upcoming cases and rulings lead the core of several professionally-oriented content services that have presumed that the databasing of other people's facts was a good business.

Power Browsing: Firefox and Amplify Light Up Drowsy Browser Technology

As you may have seen in recent headlines Microsoft's Internet Explorer browser has been under attack by many virus developers trying to exploit some of its programmable features, so when I read about Mozilla's new beta of its Firefox browser I decided to give it a download and a spin around the block. I was prepared to be disappointed, but instead I have been very pleased with some movement towards features that empower individuals as content collectors far more effectively than the moribund Internet Explorer has been doing for quite some time. The browser itself seems to be simple enough and relatively problem-free, but the highlight of Firefox is its powerful tab features that allows users to display entire folders of bookmarks in one fell swoop. For us it is a gift from above, as scanning the Web for headlines, etc. can be a real chore for analysts. In just a few days of getting used to its features I'd reckon it's shaved at least 15 percent off the time that it takes for our headline production - and also allows one to have several discrete browser windows open at any time, each tuned to a specific range of content requirements. Plugins and functionality extensions are available to bring Firefox up into a more functional state, but the tab feature alone is very much worth a try.

On a more advanced note, The New York Times noted the debut of Amplify, LLC's new Web page content collection facility that allows a novice to compose custom Web pages out of text, graphics and other digital objects collected from Web pages. A simple download and registration hook one in to a toolbar gizmo that doesn't get in the way of typical browsing; when one wants to clip something into an "amp" page, just click on an icon, highlight the item (it's pretty intelligent about tables, style sheets and other Web page elements) and drop it into an "amp". Resizing and adjusting page layouts for amps is pretty simple, as well. Emailing someone an amp link makes it simple to help people get a handle on a wide range of content, and a community site at Amplify's home makes it easy for people to share their amps with one another in a blogging fashion. It's still a little buggy - my test of a clip from our headlines and weblog pages failed to save due to the software thinking that it was some erroneously huge quantity of data - and some of the features look and act kind of klunky, but conceptually it's a winner. People don't want to wait for I.T. people to put together content in the way that they want to use it for purposes both complex and simple. Think of Firefox's tabs as the simple and yet heretofore missing realtime content folder and Amplify as scissors and paste for scrapbook makers. It's amazing how just a little bit of technology made with humans in mind can brighten up content experiences so easily.

Wednesday, July 7, 2004

Software Pirates Prevailing While Microsoft Tightens its Belt: Are the Intellectual Property Wars Hitting Home?

The Business Software Alliance today announced the release of a report outlining the extent of piracy for software titles - USD 29 billion globally last year alone, whereas in the same period USD 51 billion of software was legally purchased worldwide. Notably China pirates more than 90 percent of its software, according to the report, while Western Europe is coming in at a relatively hefty 36 percent rate. In an interesting parallel today The Washington Post (REGISTRATION) notes Steve Ballmer's annual employee email declaring that Microsoft is searching for a way to reduce USD 1 billion in annual operating costs while noting that open source operating systems such as Linux are one of the major hurdles that the vendor faces in the years ahead. Subtext written in bold: it's hard to compete with folks building core I.T. software for free, much less all of the people who want to take expensive stuff off your hands for the same price, so engineers had best get used to thinner times. All of this is bad news for developed nations which are in effect providing pirate nations with industrial development subsidization and underlines the problems that many content vendors have in trying to exploit this growth profitably. There's a major crisis in conceptualizing business models for both software and content providers that has been put off for far too long. See our earlier news analysis for some wide-ranging thoughts on this problem, but in brief the need for digital rights in intellectual property management go well beyond stodgy publishers and media companies just starting to catch up with the realities of technology that's been at their disposal for decades. Let's forget about the inane and inept DMCA and start thinking as an integrated content/technology industry about how people need to make money in the years ahead in a fair manner that will really work in a global marketplace.

Tuesday, July 6, 2004

News Analysis - Up the Gap: How Enterprises are Leading the Way Towards DRM for Premium Content

Digital Rights Management (DRM) has been engaged aggressively not only by consumer media companies but increasingly by the enterprises who have lots of content to keep tabs on for to their own managers and for regulators keeping an eye on monitoring corporate operations. About the only ones not playing the DRM game aggressively at this point are the premium content providers servicing enterprises. They may have their reasons and there are plenty of pieces still falling in to place with DRM, but it's no longer a capability that premium publishers can afford to avoid. Expect companies that are willing to embrace DRM aggressively for premium professional content to come out ahead in today's solutions-oriented vContent environment.
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In Premium Weblogs: Dow Jones Inks Reuters Deal, Thomson Seals SocGen, More on FactSet/JCF, Fidelity Pulling Back on Soft Dollars, DJN-Oster Deal Done

Shore Senior Analyst Jack McConville reveals details on the new three-year agreement between Dow Jones News and Reuters, Thomson's Deal with SG Corporate & Investment Banking, further details on Jack's earlier preview of FactSet's deal to buy JCF Group, Fidelity Investment's plans to ease off of some soft dollar content arrangements with investment banks and Dow Jones News' plans to assume full ownership of Oster Dow Jones.
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Friday, July 2, 2004

Factiva CEO Hart Denies Google Threat:

A ZDNet interview with Factiva CEO Clare Hart indicates that she does not see Google News as a threat to Factiva's institutionally oriented aggregation and content technology efforts, noting that "It's a long way before quality information is free." This of course does not take into account the increasing number of subscription and registration-based sources that are searchable via Google News, nor a recognition that ad-supported content and other forms of content that have non-subscription access models are some of the most innovative and strong sources of high-quality content today. Factiva has many leading content technology capablities to lead it forward, but continuing to bash Google and other open Web search engines based on inferior content is a weakening argument at best. In the New Aggregation, companies such as Factiva must learn how to adapt to the reality that the institutions that they serve find high-quality content not only from public search engines but from their own internal search capabilities that oftentimes rival or exceed content from text aggregation services in both quality and timeliness. Where this leads companies which are still largely based on the concept of subscription access to text in a database remains to be seen.

Factiva CEO Hart Denies Google Threat:

A ZDNet interview with Factiva CEO Clare Hart indicates that she does not see Google News as a threat to Factiva's institutionally oriented aggregation and content technology efforts, noting that "It's a long way before quality information is free." This of course does not take into account the increasing number of subscription and registration-based sources that are searchable via Google News, nor a recognition that ad-supported content and other forms of content that have non-subscription access models are some of the most innovative and strong sources of high-quality content today. Factiva has many leading content technology capablities to lead it forward, but continuing to bash Google and other open Web search engines based on inferior content is a weakening argument at best. In the New Aggregation, companies such as Factiva must learn how to adapt to the reality that the institutions that they serve find high-quality content not only from public search engines but from their own internal search capabilities that oftentimes rival or exceed content from text aggregation services in both quality and timeliness. Where this leads companies which are still largely based on the concept of subscription access to text in a database remains to be seen.

Microsoft Debuts Hand-Me-Down MSN Searching While Developing its Own Capabilities

As noted by Reuters and other major outlets the new MSN search engine is largely a hand-me-down from Yahoo! technology while the Redmond crew continues to tune up its own search technology. Eliminating some contextual search ads was part of the short-term sacrifice required to get this effort rolling, and the product suffers as a result. Some features such as a dictionary lookup are nice, though crudely integrated via a drop-down selection box, but over it looks like - and is - hollowed-out version of Yahoo's own capabilities, which in turn emulate many of Google's industry-leading capabilities. Most importantly, none of this appears to be a meaningful step towards more robust enterprise search capabilities. It's inevitable that a major company such as Microsoft will get significant attention when it makes the most minor of changes, but overall this announcement rates as no more significant or useful than last week's find.com non-launch. There are many companies out there who seem to have some of the basic ideas in their minds as to what's required to create vContent but unfortunately there's a surfeit of companies who think that a familiar interface can conceal the lack of truly useful capabilities and content.

OneSource, But Not Every Source?

With all the discussion of the acquisition of OneSource by infoUSA, one name is conspicuously absent from the conversation: idEXEC, the infoUSA subsidiary that to my mind has the best fit with OneSource, and offers the most opportunities for new and joint product offerings. This, and a few other factors, gives me a bit of concern that infoUSA may not fully understand what it has just acquired.

infoUSA has put OneSource into its Donnelley Marketing division. That seems like a reasonable move, as Donnelley has deep experience with the bigger corporate clients that comprise the OneSource customer base (although I am willing to wager the overlap in customers lists isn't large). At the same time, the roots of Donnelley are in consumer data, not business data. Donnelley Marketing now hawks infoUSA business data in addition to its consumer files. Can we conclude from this that OneSource will soon be offering consumer data as well? That's a move that shouldn't be made in haste.

Published press reports seem to indicate that infoUSA can't wait to swap out the D&B file currently licensed by OneSource for its own business file. Again, a reasonable move on the surface, but even leaving aside the hotly debated issue of data quality, these are not identical databases, and there is a risk this could be disruptive to customers. In the hotly competitive aggregation business, you never want to disrupt your customers.

In the most recent issue of InfoCommerce Report, infoUSA's Chief Marketing Officer, Rakesh Gupta, said in regard to OneSource that, "it's not that different a business ... both companies are in the content business from our point of view." Once again, a statement that sounds reasonable on the surface, but the devil is in the details. infoUSA made its name as a list compiler; it knows how to gather and maintain data. OneSource made its name as a data aggregator/reseller. It doesn't know how to gather and maintain data (as its painful acquisition of the CorpTech database proved), but it understands how to package data from both a software and marketing perspective. Complementary? Yes. Same business? Hardly.

Then there's idEXEC, acquired by infoUSA to be its repository of deep, real-time company information that could be used for high-end sales prospecting. If that sounds a little like OneSource, you see my point. After an initial flurry of new products, new features and expanded datasets, idEXEC got very quiet. Not necessarily bad, but curious all the same.

The new president of OneSource, Yvonne Cekel, has made comments that suggests that she will focus on developing new products for OneSource. My suggestion for quick results? Run, don't walk, over to idEXEC and start comparing notes. If you don't already know all about them, you should.