Monday, June 30, 2008

The Payoff: LinkedIn Focuses on Monetization through Ads and Targeted Research

LinkedIn's growing success is both admired and feared by many in the content business, but the rap against them for quite some time has been, "Well, yeah, but where's the monetization?" In truth LinkedIn has been growing revenues steadily through traditional brand ads, partnerships and payments for premium services. But with two key moves LinkedIn is raising the bar on its prospects for revenues - and for a potential exit at a more appreciable price.

The fist LinkedIn initative is its new DirectAds service, which enables LinkedIn members with profiles to produce simple text ads on a self-service basis that can appear in other members' profile pages. Similar in overall concept to Facebook's SocialAds program - a link to the advertiser's profile appears in each ad to ensure that marketing is on a conversational basis with a known entitiy - DirectAds has the added benefit of being able to target executive peers in the LinkedIn network with a great deal of granularity - and charges healthy but affordable minimum rates to do so - a $25 minimum for a flight of ads, with impressions based on a variable formula. Filtering options include many of the criteria found in a typical member's profile, including the ability to limit ads to specific geographic regions.

The potential for DirectAds is very strong within LinkedIn itself, but it also has the potential to provide B2B publishers with some real concerns as this evolves. Though there is no announced plan to take DirectAds off-site into other publishing venues, certainly classifieds in B2B journals and Web sites could be easily targeted by LinkedIn with its extensive network of top-shelf executives and salespeople. More importantly, it's not too hard to imagine that a B2B publisher seeking revenues from companies trying to get a message through to very specific executives would jump at the chance to use DirectAds to get rates far higher than classifieds for its very targeted profiling capbilities. In very tightly knit B2B communities DirectAds would play very well in B2B publishing venues. Technologically, it would not be hard to implement at all - it would only take enabling a B2B publishing site with Google's OpenSocial API. With such a combination DirectAds would have a Google AdWords/AdSense revenue combo for on-site/off-site revenues that could be impressive indeed. If done properly - hopefully avoiding Facebook's pratfall with its Beacon program that released private data in a user-unfriendly manner - this has the potential to be to B2B publishing what Google was to consumer publishing, turning advertising into relationship building with one click of the mouse. With its potential for ultra-precise targeting, it could put somewhat of a dent in marketing lists services as well in time.

The other interesting new program at LinkedIn is the LinkedIn Research Network, which leverages some of the concepts that it employed in LinkedIn Answers to provide a tool that can enable executives to conduct peer-to-peer industry research. As in LinkedIn Answers members of LinkedIn can pose questions to peers in the LinkedIn network, using LinkedIn's extensive structured and unstructured member profile data to zero in on just the right people to target for questions. The Research Network provides its users with a workbench to monitor responses to questions and to in effect build research panel who can be contacted for additional questions.

The revenue hook in Linked in Research Network is its use of LinkedIn's private InMail network to contact members. Members may use InMail for contacting up to 20 people at a time, presumably to cut down on "spam" research requests and presumably to make it easier to meter the pricing to a reasonable block of minimum requests. Of course, one can sign up for InMail at any number of premium levels, so the real hook is to promote InMail premium subscription revenues as much as possible. Given that the demo video was intent on saying that this product was targeted primarily at financial industry analysts trying to contact experts in companies and market sectors, perhaps their initial expectations for its use are limited. But clearly its ability to combine the art of research into the art of marketing will make this a popular option for many over time.

With both of these options LinkedIn is taking a relatively low-key approach to product development, moving relatively slowly to ensure that their most valuable asset - the trust and security that the LinkedIn system of opt-in relationships has protected through its development - will not be tainted or abused. Executives are a conservative bunch when it comes to dealing with their personal reputations, but LinkedIn has proved to more than 20 million professionals so far that it is by and large a very trustworthy environment. With that trust as a primary asset, it's likely that LinkedIn has set the stage for some solid revenue development that is likely to upend a few B2B applecarts in the long run. For the time being, though LinkedIn is just at the begininning of what promises to be a long battle for the rights to what professionals value most in carrying out their business - trusted relationships that can yield revenues.

Thursday, June 26, 2008

Cruising the Mall: Microsoft Scoops up Powerset for Universal Search

It seems like only a few weeks ago that I was blogging about semantic search startup Powerset's soft-launch beta. In fact, it WAS only six weeks ago that we were covering Poweret's soft launch of new semantic search technology. But in that six weeks Barney Pell's crew got in a ton of good PR and a few meetings that have already resulted in a USD 100 million exit into the hands of Microsoft, according to VentureBeat. It wasn't so many years ago that Barney was a part of the bumpy exit of WhizBang Labs and its Web mining technologies. This time around his team was well ahead of the burn rate and blessed with both a good idea and good timing. With tons of cash on hand after their war chest for a Yahoo acquisition Microsoft was ready to vent by spending some large (or, for them, small) at the deals mall to pump up its search for more advertising revenues.

Given Powerset's ability to parse natural language questions as well as to provide "factz" topic clusters that could draw in related content, the target for Microsoft has to be the revived Ask.com portal as much as Google's leading search engine. Already Microsoft's Live.com search engine provides rich search results that emulate Ask's more user-friendly approach to search-driven content aggregation, but Ask still manages more meaningful responses based on natural language queries. Better front-end parsing and clustering of results terms from Powerset's technologies would certainly help Live to get more relevant and rich results that could help to build a larger audience, though how Powerset's technology will fare in absorbing Web content lacking the encyclopedic style of it's trial Wikipedia content remains to be seen. On most test queries using natural language questions one finds Google to be at least or more relevant in its results than existing major search engines, so even with new semantic technology Microsoft has its work cut out for them.

A better match for Powerset might be found on the enterprise side of Microsoft's offerings, where its recently acquired FAST enterprise search technology may benefit from some extra semantic search and clustering mojo - and find somewhat more structured content sources against which to apply semantic algorithms. That's not to say that Powerset won't succeed with open Web content, but in general semantic search technologies are most easily tuned when they're digesting documents with relatively similar styles. It would seem that this would be easier to tune to an individual enterprise's needs overall than to a world of Web content that could be in any shape at any time.

A better question might be why Microsoft hasn't considered purchasing Answers.com if they are so interested in natural language queries. With millions of pre-formed questions already in its WikiAnswers database many natural language questions map very neatly to its answer sets. In other words, sometimes the best answer to a full-sentence is a person who understood the question in all of its semantic details and has already provided the answer. This is far from a goof-proof solution to semantic search, but it's an approach worth considering as a valuable supplement to semantic document parsing.

In any event the Powerset set now finds itself in the enviable position of having sold their ship before it ever went down the launching track into the waters. That's certainly more than a few publishing portals can say these days. Congratulations to Barney and all of the other rocket scientists at Powerset - it pays to have a technology that solves a problem that companies with deep pockets are ready to get their hands on.

Tuesday, June 24, 2008

NYSE Goes "Real-Time" to the Web: Accepting the New Buy-Side Reality

The New York Stock Exchange has been careful through the years to keep feeds of trading data released to public media outlets hobbled with a fifteen-minute delay - in part to protect its revenues from financial institutions being charged for real-time data and in part to offer their member firms an information advantage that would help them have an upper hand with retail investors. But with most of NYSE's competitors being far more lax about releasing real-time trade reports and the definition of "real-time" having changed with powerful new low-latency trading systems for professional traders NYSE has re-evaluated its position on real-time trade reports for the public. Today NYSE Euronext launched its "Realtime Stock Prices" product for media, allowing unlimited distribution of real-time quotes to the public without tracking individual use. The product requires a distributor to pay an undisclosed bulk fee for the rights to public data distribution.

With NYSE's share of securities trading slipping and it's reputation as a market friendly to small investors slipping along with it real-time quotes from the public should have been a default position years ago, as we've argued oftentimes in ContentBlogger. Today's retail investors have more options than ever for making money in the markets, with NYSE's stumbling "blue chip" stocks being far from the most attractive alternatives for many. Forcing people to pay for real-time trade reports was only discouraging further participation in NYSE equities markets by retail investors - especially when other exchanges seeking market share were more than glad to use market data as a lure to new traders.

CNBC has long been a leader in public market data - I led the development and installation of their first delayed data system years ago for Quotron - so it's expected that they've opted to be on the edge of NYSE's release of this product. But the other announced client - Google - is one that was expected also but one that couldn't have come at a worse time for Yahoo. Real-time quotes from NYSE have been available from Yahoo at a premium for many years, so in a time when they have been trying to look plump to acquirers it's not surprising that they didn't opt to give up their NYSE quote revenues ("back door" real-time quotes from private electronic markets on Yahoo aren't strongly representative of the full market). So by default the go-ahead went to Google, whose Google Finance portal has become a very strong content offering. If nothing else the public knowledge that full NYSE real-time quotes are available at Google will provide some needed publicity for Google Finance at a time when Yahoo is slow to give up existing revenues.

I would hardly be alone in chastising NYSE for dragging their heels on releasing real-time quotes to the public, but it's sad that it has taken this long to get NYSE to make this move. It is, unfortunately, a familiar refrain in the content industry: major institution covets proprietary content revenues, squeezes them out for as long as possible while the markets move to find both acceptable substitutes and better ways of doing business. Publishing is in essence a very conservative business, so it's not surprising that NYSE would try to keep this formula going for so long. But in an era when the buyers of securities have and demand information at least as good as most selling institutions failing to serve the buy side in financial markets effectively is to ignore the fundamental shift in the content industry that empowers people with independent access to content from around the world. Your content may seem safe as a proprietary asset, but if it's not driving your clients' profits in its most valuable user-defined contexts it is far from a safe bet in today's content markets.

Nokia's Move to Open Mobile Software: Aimed at Google, But Impacting Publishers

The mobile phone world was a-twitter with word that Nokia has purchased mobile software maker Symbian and will make the core of its software an open source resource some time later this year via a new Symbian Foundation, with other open-source assets to follow. Engadget notes that the Symbian foundation will include many of the mobile industry's biggest names and will include technology donated from both Nokia and many others, including Motorola, Sony Ericsson and NTT DoCoM. Other members will include Texas Instruments, Vodafone, Samsung, LG, and, interestingly, AT&T, which has had great success as of late with the proprietary Apple iPhone platform.

Clearly the impending launch of Google's open source Andriod mobile platform, delayed in launch until the fall but looming nevertheless, has forced the hand of mobile equipment providers and network operators to consider the potential impact of having their highly proprietary approaches to mobile technologies "googled" away to the demand for more common mobile standards for software to power more content services development. By creating a common core of technologies based on a company with which it's had a long-standing relationship Nokia gets to expand the value of their knowledge of the platform in a way that may transform their business model over time from one of manufacturing to one of enabling systems development. Given the demand for mobile services in developing nations this will enable companies like Nokia to have a hand in those markets without having to bear the full cost of either hardware or software development through the Foundation's partner network.

But more importantly for the content industry this puts at least as much pressure on providers Microsoft, Palm, Apple and Research in Motion to recognize that there is ever more pressure on proprietary operating system solutions to justify their ways. With speed wireless broadband network services opening up the Web to mobile devices the ability to deliver platform-specific content services will become icing on the cake for those who want new status toys but for the bread-and-butter corprorate worker or mobile entrepreneurs and family members it may take more than just a few proprietary services and a delightful interface to keep people locked into a proprietary platform. For content suppliers looking for new "choke points" via proprietary platforms the short-term news via suppliers like Microsoft, RIM and Apple looks good, but the picture over the horizon is likely to look vastly different in less than a year. Be it via the Symbian Foundation or Android platforms, publishers need to stop looking again and again for new ways to activate old business models via mobile platforms and look far more aggressively at how they will survive and thrive in a world enabled with open and universal access to Web-enabled content sources.

Monday, June 23, 2008

In the Battle Between Thomson Reuters and Bloomberg, the Winner May Be the Cloud

A day that highlights world financial giant Citigroup's layoff of about ten percent of its workforce is a somewhat odd time to be running a profile of Thomson Reuters, but The New York Times has done just that. The article is entitled "The New Fight for Financial News," but of course the battle between Bloomberg and its perennial rivals now combined into a single company is fought on may levels well beyond the news front. Thomson Reuters CEO Tom Glocer likens Bloomberg in the article to the equivalent of Richard Branson's Virgin Atlantic airline shaking up the marketplace for transatlantic flights in the 1990s, an apt analogy on at least two levels. It's apt in the sense that Bloomberg forced its competition into many radical and painful changes to keep up with its growing market share - the new combined Thomson Reuters entity is just about toe-to-toe with Bloomberg for its piece of the financial information marketplace - but also apt in the sense that there's a new generation of competition that's putting both the financial information marketplace and the airlines on alert.

That new generation is not necessarily of the same type and heritage as either Thomson Reuters or Bloomberg. What impressed me most at the recent SIFMA conference and expo in New York was how the traditional financial information vendors are receding into the background as the technologists are coming to the fore. The exhibition floors were chockablock with networking technologies this year, both for low-latency automated trading services and for more general information and trade execution network services from vendors such as BT Radianz. Cloud computing was also on display at the SIFMA show from Salesforce.com, with a more aggressive and extensive display of its capabilities to support brokerage marketing operations. Also noteworthy was SDS Financial Technologies' moves to support more automated crossing networks for commodities and futures trading, helping to reduce execution costs and liquidity problems for a marketplace still tied to many face-to-face trading pits.

So while companies like Thomson Reuters and Bloomberg are going to continue to try to dominate on the desktops of investment bankers and portfolio managers for the foreseeable future, a lot of the action in financial information is taking place well away from the desktop and in the bowels of computer networks that support securities trading and sales. Not all of these stories are about the dominance of the Web as the cloud of choice - the financial marketplace has many specialized networks that support its sophisticated information-driven marketplaces - but certainly the concept of cloud computing popularized by the Web in which desktop technology is just an interface to sophisticated services from potentially any network providing information and execution services. Certainly the robust trading floor technologies developed in the past few decades will continue to be a part of this mix but with today's cutbacks by Citigroup serves as a reminder that we may be nearing the end of the era of big investment bank trading floors as the driver for measuring the success of financial information services.

With more and more workflows in securities trading having become fully automated in recent years it's not clear that the desktop-oriented services of companies like Thomson Reuters and Bloomberg are going to work out in the long run for high-growth information services. Instead, it's far more likely that more and more network-oriented "cloud computing" services are going to subsume more and more profitable parts of securities transaction support while information suppliers find an increasingly narrow range of clientele ready to spend handsomely on major desktop integration services. While the hedge fund trading of recent years hit speed bumps in recent months much as programmed trading caused hiccups in the 1987 crash, the ability of a small team of hedge fund managers to build dominant positions in a marketplace by mining information aggressively from alternative information sources not provided by traditional vendors should be a wakeup call to Thomson Reuters and Bloomberg that anyone can extract useful content from any cloud very quickly and effectively.

Major financial information vendors have had similar challenges in the past and have responded with valuable services to rebuild their position in the marketplace, but it's not clear to me that we're on another full-blown cycle towards that goal right now. I think that we're more likely to see cloud computing services gaining more and more power as they provide well-integrated information services to ever more concentrated and sophistated trading operations. I don't think that this means that Lehman Brothers will be moving back to its old South William Street HQ any time soon (now a cozy inn) but I think that we will be seeing the financial information industry looking more like it did in the 1950s than it did in the 1990s over the next ten years - with fewer and fewer direct product presences on trading floors and more and more integration into cloud computing services. There are opportunities there for Thomson Reuters and Bloomberg as well, of course, but perhaps not the types of opportunities that are driving their organizations today. In the meantime, congratulations to Tom for a great profile article.

Tuesday, June 17, 2008

AP Challenges Weblogs on Use of Content. Is the AP Brand at Stake?

I've tried to remain low-key about the Associated Press action against the Drudge Retort, a parody of the famous Drudge Report political Web site, but given the furor out there I think that a post on the topic is worthwhile. The AP has raised "takedown requests" claiming violations of the Digital Millennium Copyright Act (DMCA) and other laws in unlicensed use of its content in seven of the Drudge Retort's blog post. Not only is the Drudge Retort being challenged on its own use of AP's content but as well for people in comments sections that quote paragraphs from AP content. The Drudge Retort's Rogers Cadenhead commented on the takedown letter on his own weblog and provided a summary of each of the takedown requests, citing the examples.

Similar to the lawsuit raised by AP against Moreover for their use of AP headlines and ledes to provide links to AP content the concern of AP seems to center on the use of headlines and ledes as copyrighted content. Unlike the AP/Moreover suit, though, this takedown letter focuses on only seven items rather than a bulk use of AP headlines and ledes. And unlike the AP/Moreover suit, some of the headlines on the Drudge Retort site were not AP headlines but headlines rewritten by the site's staff. Also notable was that the sections of text from AP stories were quite small. In all of the sections posted by the Drudge Retort itself they were either just a lede sentence or a lede plus a quote from someone at a public event.

The Drudge Report appears to have complied with the takedown order and AP's Jim Kennedy promises guidelines for bloggers using AP content, but awareness of it spread quickly through social bookmarking services and weblogs and has ignited a widespread reaction from major bloggers and mainstream commentators. TechCrunch's Michael Arrington offered one of the stronger statements, claiming that his prominent weblog would no longer reference AP content. Others were more inflamed in their rhetoric, including this gem from Matthew Ingram:
I don’t want to be accused of succumbing to Godwin’s Law, but I would argue that a dialogue with the AP has about as much chance of being “constructive” as Chamberlain’s discussions with Hitler over the fate of eastern Europe.
The New York Times' Saul Hansell tries to steer a calm course through the AP challenge in their Bits blog but in the era of sub-millisecond delays of information transition used to power most large-scale trading of financial securities his citation of the century-old "Hot News" New York statute is shaky at best. If someone is linking to a story that's already minutes, hours or days old on the Web, much less in investment banks, how "hot" can that news be? And since to get the story in full one must still go to the licensed source, the licensed source is going to benefit financially from more public awareness of their having a story available.

The clear benefit of inbound links and short, fair use-style citations can be seen in the impact that social bookmarking has had on AP licensors. Looking at the data at right from Compete.com, news Web sites that are major licensors of AP content do not appear to have been harmed by the growth of social bookmarking sites such as Digg, which provide similar small snippets of content and headlines from AP and other sources. In fact, one could argue by such a trend that much of the growth at news sites in recent years has been due to the attention that weblogs and social bookmarking sites have paid to their content. Social media is the news world's best friend at this point, providing an editorial capability that curates high-value content from professional media organizations that would otherwise be ignored.

But the real point seems to be whether AP can gain financially from this exercise. Facing a dwindling number of mainstream media companies available to purchase its content AP its struggling to come up with a way to build a broader base of revenues in an environment in which their audience has become a far greater source of content curation than their traditional client base. Whatever the validity of AP's legal citations - they seem to be to be quite weak and awaiting only a decent lawyer in opposition to them to have them swept away - they are alienating the very marketplace that is driving growth for their existing licensors at a time when that marketplace needs AP content less than ever before. It is all too unfortunately like the RIAA-led lawsuits against consumers of online music, which have done little to change the fate of music publishers who have lacked a coherent marketing strategy to deal with the power of online music consumers to drive both tastes and sales.

As valuable as AP content may be, for most news stories that people will link to and comment upon online there are readily available substitutes from other wire services. AP's position as a service bureau complicates their ability to counter the power of proprietary wire services such as Reuters and Agence France-Presse, but clearly the problem is one of having only so many popularly-tracked newsworthy events to cover that will result in real "hot news" that others lack. In the meantime weblogs and other emerging publishing outlets are creating new sources of news and newsworthy opinions that could be syndicated by AP into their distribution network far more aggressively.

From a marketing perspective the real issue for AP, like the music business, seems to be far less about protecting an existing product line and far more about what needs to be done to rethink both the product line and the marketing rationale for the core product. Instead of resorting to lawsuits and takedown letters as a primary strategy to enforce the value of AP content on the Web, tactics that could create both legal confusion and a potential dilution of the value of the AP brand in the eyes of consumers, AP needs a "win-win" strategy that looks upon the drivers of economic value in online publishing more realistically - and that begins to incorporate new sources of content worth distributing to its worldwide subscribers and more valuable services.

A more refreshing approach to the opportunities available from social media is definitely in order. Simple example: instead of thinking about charging people for using AP headlines, why not PAY people for the click-throughs that they bring to subscriber content and charge higher rates to subscribers for the service? Hmm, maybe those bloggers are pretty good folks after all.
In the meantime, perhaps that nice linear relationship between social media growth and sites using AP content may not be looking so linear for a while.

Thursday, June 12, 2008

Yahoo Opts for Google Ad/IM Deal, MSFT Deal is Off. Can We All Go Home Now?

In what promises (for now) to be the end of the Silicon Valley soap opera known as the future of Yahoo, AP reports that Yahoo opted to seal a deal with Google for both the use of Google's ad network and enabling the interoperability of their instant messaging networks shortly after having announced the suspension of their attempt to revive talks with Microsoft on a potential acquisition deal. Yahoo shares tumbled immediately afterwards, leaving the long money on Yahoo holding a devalued stock but a deal that is likely to be one of the best ways forward for ensuring a reasonable future for Yahoo.

As noted two months ago in ContentBlogger, a deal with Google seemed to have been the best route for Yahoo all along, promising lots of new Yahoo page inventory for Google's more robust ad inventory and complementary media and technology profiles that were never as much at loggerheads as people made out some years ago. As for Icahn et al., while some may have been looking out for shareholders wanting short-term money out of what they had assumed was a cooked goose they never really seemed to have the goose's best interests in mind - or, for that matter, the best interests of Microsoft shareholders. After Yahoo would have been carved up it would be hard to believe that there would be a whole anything that would be greater than the sum of the parts.

As much as people tried to paint this as a Yahoo desperation deal clearly it was moreso a desperation deal by Microsoft to buy some time to build a broader position in online markets for its faltering ad network, with virtually no apparent upside for Yahoo properties. There was a lot of Ballmer bluster but underneath it all Microsoft was rolling the dice heavily for a very risky deal that had little solid strategy behind it beyond a temporary ad revenue boost from peeling away Yahoo ad accounts.

By contrast the deal consummated by Yahoo with Google is expected to pump in significant new ad revenues to Yahoo from Google's superior ad network, a total win-win any way you look at it. The deal is non-exclusive, so Yahoo can choose a plan "B" any time that it wants. In the meantime the other huge win-win is the promised interoperability of instant messaging networks. Google already has interoperability with AOL's still-popular messaging network, so the stage is set for the next major deal to whisper about - a Twitter acquisition that will provide a unified front end to the world of instant messaging.

With a generation of Web users coming of age focused on IM, Facebook and other platforms, email systems creaking with offensive and virus-laden spam have become a legacy messaging technology that wil die a slow and largely unprofitable death in much the same way that the telegraph lingered well past its prime. We use email because we have to - not because we want to. Focusing on accelerating the growth and usefulness of IM systems while leaving their email services to take their own paths is a smart move for both Google and Yahoo. A merger of Yahoo mail accounts to either Google or Microsoft's mail networks would have been a long, painful and largely unprofitable endeavor.

I felt all along that an independent Yahoo would be better for the content industry as a whole so I am glad that at least tonight we can go to sleep knowing that there will be a wider variety of good platforms through which to publish content than if the Yahoo deal with Microsoft had gone through. Jerry Yang's team still has a lot of challenges ahead of them but with an improving stable of user-friendly destination content properties and a progressive approach to supporting brand advertisers Yahoo promises to have a strong place alongside other major online portals for some time to come. At least I hope so - I really don't relish a deal war as ugly as this one any time soon.

Monday, June 9, 2008

3G iPhone Launches with Developer's Kit: Let the Competition Begin

The world tripped over one another to ooh and aah at the latest version of Apple's iPhone, a somewhat sleeker model with 3G wireless Internet access and a software development toolkit that enables applications to be built for the iPhone that can take advantage of all of it's "new hotness" interface features. Prominent among the new applications at launch is Microsoft Exchange, a shot across the bow to enterprise users equipped with Blackberries and feeling that, well, they're just not as hip as the next sales and busdev guy. Toss in promised interfaces to home appliances and Microsoft's home strategy takes a bit of hit as well.

Also prominent is the new USD 200 domestic price tag, presumably subsidized by AT&T in much the same manner as other mobile phones to promote mass sales and mass usage of AT&T services. Now people wanting to keep up with the tech-leader Joneses down the street can pile on and join the fun. Put these factors all together and you have a highly competitive platform (albeit one that still lacks a keyboard) that makes consumer and enterprise content accessible in mobile markets as never before. That's the good rah-rah news, in any event.

The not-so-good news is that the exclusive deal with AT&T puts pressure on other mobile carriers to come up with their own deals that can compete with AT&T at a price point that's much closer to attainable luxury for most folks. Supporting a plethora of platforms has hindered the ability of applications developers to create software that scales to markets and has drageed down enabling full Web access on 3G networks, hobbling the ability of U.S. carriers to prepare for this inevitable moment of challenge by Apple and AT&T. Instead of focusing intently on content, most mobile carriers have focused too much on the tech of the platform, instead of viewing mobile devices as just another blank screen that can be painted with content from any application.

However, these aggressive moves by Apple and AT&T may be more a preparation for emerging competition. Microsoft or Google or both will benefit from other mobile carriers and device makers trying to create more cost-effective alternatives to the iPhone now that the USD 200 price barrier has been breached. Microsoft is the more likely beneficiary in the short term, but with profitability becoming an issue, especially with the cost of 3G Web services pushing margins down, Google's Android cross-platform operating system is likely to emerge as the platform that allows more profits at lower price points for both mobile device manufacturers and carrier networks. As noted in TheStreet.com recently a preview version of an iPhone-like phone equipped with Andriod offered touch-screen operation, 3G Web access, software development interfaces for applications and many other features which are likely to come in close to iPhone functionality without the content and software licensing baggage that comes along from Apple.

There's no doubt that the iPhone will continue to be the Lexus of Web-enabled phones for a while, but there's also no doubt that the world has been waiting for the Toyota version to show up for a while. Especially in burgeoning markets like China and India, where Apple's licensing strategy is likely to be less appealing, Android-equipped phones that enable integrated Web access and language-independent hardware are more likely to be the global winners in mobile communications. So while the hoopla around the iPhone 3G launch looks hot for today, remember that in the fall we're likely to be talking about a different perspective on its future.

Friday, June 6, 2008

Hoover's Continues its Freshen-Up With More Content and Features

Building on Wednesday's launch of free individual and bulk company data from Jigsaw there's an announcement from business information provider Hoover's on its addition of more than a million new contacts for mid-level executives in major companies from an unnamed third party source (but given which service is focused on harvesting mid-level contacts from sales professionals it's not too hard to figure out). Pull up the record for GE, for example, and Hoover's provides access to more than 4,500 employees, now including employees from subsidiaries as well. That helps to cut down on the "which of those doggone divisions is he/she in?" conundrum that can slow down the search for appropriate contacts. With company records becoming increasingly commoditized this emphasis on contacts data integrated in with its Hoover's Connect social media feature is a key component of Hoover's future.

The other neat function is the ability to add one's own profile into the Hoover's business information database, somewhat along the lines of what ECNext is doing with company information on their Manta platform targeted at small to medium sized enterprises. Add in your bio, education, memberships in associations, add an option to receive contact via the Hoover's platform and it's off to their editors for final review and posting. You have to go looking for the feature way down on a company page, but it's there and is a start towards enabling the gathering of the kinds of valuable information that LinkedIn and other business-oriented social media services are enabling.

Overall Hoover's continues its efforts on reviving the once-flagging brand that had been turned into a cash cow by D&B just about the time that it needed serious new investment. The need to turn the cow into a star again is now clear at D&B and many of the efforts are starting to pay off. Long a leader in pressing the envelope for online workflow design, The Hoover's interface manages to present a ton of information and a wealth of features in a highly usable form. The real question seems to be, though, when and how often people will visit the Hoover's portal - or any heavy-duty business information portal.

Business information tools like Zoominfo beckon with a Google-esque simplicity to its ad-supported design and fairly rich features, if with less in-depth content, from its subscription-level service. The growth of Zoominfo in particular seems to be putting a damper on both established business information services and up-and-comers as it aggregates content harvested from with web with licensed content supplements. Part of Hoover's response to this "stickiness" issue is to highlight their editorial staff via topic-oriented business blogs that are featured prominently on the ad-supported front page and elsewhere within the site. It's an innovative move, but one that seems to be still looking for a big payoff in improved site traffic.

The main problem that Hoover's and other business information services face is that it's hard to keep on heaping on great portal features and expect to get commensurate returns on the investment in those features every single time. With a wide range of contexts in which people want business information on a personal and professional basis the ability to integrate content in contexts far beyond one's portal becomes a key factor for building the brand value of business information. At the same time there are more opportunities to use the value of contexts in a portal such as Hoover's to gain more lucrative positioning of ad-supported content. Instead of having some mass-market ad show up when someone with a known business profile is looking at a company's information, isn't that the perfect opportunity for that company to tout itself or to have related B2B products and services crop up from a ThomasNet network or such? The ad value of business information is still very underappreciated and under-exploited.

So overall the Hoover's portal continues to make healthy strides forward but it must continue to build innovation in a year in which the economy makes "pretty good" free or more targeted substitutes more popular than ever. Both the short-run and long-run track for Hoover's continues to offer challenges that they must battle, but at least their sword is getting sharper in order to take them on.

The Plight of Radio in a Broadband Era

I was telemarketed by a polling company the other night, one of those occasional attempts to figure out what adults listen to on the radio these days. Given my profile the questions were rather quaint. What New York music station do I listen to? (None.) How often do I listen to the radio? (Basically for traffic, occasional news and the ball game.) Do you listen to online music (oh yeah, that and the cable music stations). Mercifully they didn't make me go through a list of artists who I don't listen to anyway, but it was interesting to see that even in the face of more than a decade of online music radio station marketers are asking the same old questions so that they can tweak the same old radio formats again and again.

I think of this in particular in light of the U.S. Federal Communications Commission's plans to auction off a portion of the radio spectrum for a free nationwide broadband Internet service. While the plan is experiencing a few snags at the moment, it appears that the free broadband network, which will be supported by advertising fees of which the feds will take a proposed cut, is likely to become a reality in the next few years. At that point there will be a fairly universal "ether" out there that will be available for any Web-enabled content for people - and autos - on the go. With that in mind, one wonders why the questions in these phone polls aren't already going:

"If you had a choice as to what content you'd like to hear come over a traditional radio station that coordinated with online services. what would it be?"

"If our digital sideband data services could allow you to purchase music that you're listening to on the radio with one click of a button into your Bluetooth-enabled music player while you're driving via a free broadband network installed in your car radio or mobile device, would that be of interest to you?"

"If our music programming could be tuned automatically to the most favorite music in a category from the Pandora online music service, would you listen to it?"

My apologies to questionnaire designers everywhere, but somehow these are the types of questions that radio executives should be asking their audiences - and themselves.

SIIA Brown Bag Lunch: Publishers Get ARMed! Attract, Retain and Monetize through Search

The shameless self-promotion division of Shore is proud to announce that I'll be amongst the speakers at next week's SIIA Brown Bag Lunch panel presentation on Wednesday, 11 June focusing on how to attract, monetize and retain audiences and clients through search technologies. The panel will be moderated by Leslie Kues, Senior Director at Microsoft's FAST with my distinguished co-panelists Kate Noerr, Founder, Chairman & CEO of MuseGlobal, Stephen Baker, Chief Revenue Officer for EveryZing and Barbara Kroll, Director, Corporate Strategy for Wolters Kluwer. It promises to be a great panel, including both publishers using search in enterprise and media markets as well as two leading technology companies helping publishers and enterprises to get more value from search as a publishing platform. Registration information is here, it's going to be available as a live event at the McGraw-Hill Building in New York as well as an online video event.

As for myself, I will be emphasizing how search is a publishing tool that is not just about the "white box" and a list of results but a technology that can enable content to be aggregated in a "just in time" publishing environment to support a wide variety of content applications for media and enterprise markets. If you're planning to come you may want to catch my earlier entry "Beyond Search Engines: The Database is Now" to get a feel as to how search engines are starting to replace databases as the primary content gathering mechanism for content applications and its implications for publishing. Long story short, the way that financial markets thought about stock tickers and trading room system middleware is how more advanced publishers are beginning to think about search engines.

Hope to see you at the brown bag - no food but plenty of beverages and great cookies - trust me.

Wednesday, June 4, 2008

Jigsaw's Open Data Initative: Bait for Building Collaborative Business Information



Hats off to Jim Fowler, who has to be one of the gutsiest startup CEOs out there. Taking on the heart of the business information industry with his Jigsaw collaborative community that collects business contact and company information is one thing: personally announcing the launch of their new Open Data Initiative in a YouTube video shot on some of the more funky streets of San Francisco is quite another. It sets the scene for a very interesting move into promoting the use of Jigsaw as a service that can enable people to get high-quality contact data by giving people free access to company information.

Jigsaw has built up a base of about 450,000 people who give and take business contact information and challenge one another's submissions via the Jigsaw portal. Think of Jigsaw as Wikipedia for business contacts with far better rules and to boot a premium content model. It's a "give-to-get" model that allows people to earn credits towards getting business contact information for free if they provide enough quality information themselves but which will also charge people to see contact information if they have maxed out their quota for free contact views. On the back end of this database Jigsaw has built a tidy little business selling the information collected via their portals to enterprises and other services that need up-to-date contact and company information in their internal databases and sales automation services.

It's a good business, but the hard part has been scaling the online community to the point where Jigsaw becomes a must-visit destination that will enable them to build up information beyond the 2 million businesses and 8 million contacts already tracked in their database. Making the basic company name and address information available for free - it comes along anyway on the business contact information that people input on Jigsaw - creates a powerful endorsement for membership in Jigsaw that's likely to push its positioning as a default destination for inputting business contact information. In doing so Jigsaw may have taken a huge step forward in accelerating the growth of their database, helped along by the many key sales automation platforms that are already positioned to use content from the Open Data Initiative.

Company information is available for free elsewhere online, of course, through services such as Hoover's, ECNext's Manta portal and Zoominfo, so to some degree Jigsaw's Open Data Initiative is playing catch-up with the online positioning of other business information services. However, with the Open Data Initiative Jigsaw is making this information available in bulk form as well. That's a huge step forward in neutralizing some of the power of other services that have been building their bread and butter on filtered company lists -and a strong incentive to make Jigsaw a default plan "B" feed for company information, if not their plan "A". Major business information services, please take note: those low margins on your list services just got a bit of a challenge.

What's most interesting about the Jigsaw Open Data Initiative is its potential to increase the likelihood that Jigsaw can become a more timely source of updates for accurate business contact information both from online sources and from the many enterprise services through which Jigsaw information can be consumed, and, in theory, updated. The opportunity to make desktop and mobile sales automation and email services input points for real-time business contact updates works already in a limited fashion for services like Plaxo, but with a more serious footprint in the love-to-update-those-contacts culture of today's mobile sales forces Jigsaw may have found the accelerator that they've been looking for as they've continued to refine their offerings.

In the meantime traditional business information providers continue to be challenged on all sides by nimble competitors such as Jigsaw who are willing to view their audience as knowledgeable participants in the gathering of business information. Enterprises still move cautiously towards these new services, but as they discover that interactivity with users enables them to get more accurate content more quickly there is a tipping point approaching rapidly beyond which the Dun & Bradstreets of the world must worry mightily about the ability of their organizations and their business models to survive. There is still a powerful marketplace for quality business information, but Jigsaw challenges traditional suppliers to consider how the real-time collection capabilities of today's publishing-enabled audiences can accelerate the value of those services rapidly.

Tuesday, June 3, 2008

The iPodding of Books: Kindle is the Darling of BookExpo, but the Industry is Nervous

This year's BookExpo America in Los Angeles featured much of the usual multi-story ballyhoo of years past, with a thinner crowd and thinning expectations for the book industry in general, though with a few bright exceptions. One of these exceptions has been Amazon's Kindle eBook reader, which has become the Pet Rock of the 2008 book industry. Still inscrutable in terms of its limitations (no PDFs, no general Web content) and as awkward as ever, the Kindle is the darling of book-readers on the go who can't afford the space, time or trouble of loading multiple books in their overnight bags and pocketbooks (and yes, one of them might be me when I break my el-cheapo mental barriers).

It's also becoming the darling of traditional media outlets, which have the ability to push print-like materials into a medium that's unbound from print production limits, enabling them to maximize revenues when a title gains its peak value in a very short period of time. AP notes that former White House press secretary Scott McClellan's new book on his experiences in the Bush administration sold out quickly at Amazon in print format but that the book continued to sell briskly in Kindle eBook format, albeit at a lower price. There's some question as to exactly how much Amazon really makes on the book sales themselves (the New York Times claims along with others that Amazon takes a bath on each Kindle book sale), but as Amazon CEO Jeff Bezos noted that the Kindle is still in its developmental phase it's likely that book publishers' existing business models are considered a part of the platform's developmental cost at this point.

Silicon Valley Insider's back-of-the envelope model for Kindle sales noted that if the Kindle business scales as quickly as Apple's iPod/iTunes business scaled it's possible that Amazon could be enjoying more than USD 740 million in combined Kindle device and content sales by 2010. That's highly speculative, especially given that there had been more than a decade of well-established consumption of music via online portals before the iPod came along to become a cool fashion tool for content amongst the young. Book publishers face a far tougher proposition of moving beyond a graying population of book enthusiasts still young enough to value technology as a status symbol towards younger generations that have yet to discover books at all in a big way. A whole generation of college students is now coming of age that has not ever turned a paper page on a regular basis. So Kindle's ability to grow rapidly beyond its early adopters into iPod-like growth is still in question.

That may suit book publishers just fine in the short run, given their need to maintain a pricing structure that covers the 99 percent of their sales still done in print. But now that they have locked themselves into a proprietary DRM-secured format for Kindle content they have in essence handed Amazon the keys to the paper mill for electronic content. Certainly Sony's eBook platform provides a "Brand X" that will generate the illusion of consumer choice in eBook reading, but with the extensive infrastructure and branding of Amazon people wanting to purchase content rapidly for their eInk-displayed content will have but one real choice. If in fact eBook sales rise rapidly enough to push Amazon into a position of dictating book industry pricing, then book industry executives may be wondering why they didn't consider the music industry's death at the hands of iPod's proprietary 99-cent downloads as a lesson to have been studied more carefully.

Fortunately the book industry has the opportunity to adapt to these changes in relative slow motion compared to the music industry's fast-forward realization that Apple had stolen their business model. In doing so book publishers may want to consider how music companies are learning to benefit more from broader artist management services as a supplementary line of business. As noted in The New York Times recently Universal Music Classical Artists Management and Productions has been formed as a unit to produce and profit from live performances of music and artist fan items other than CDs. Thinking of the good fortune my friend David Meerman Scott has had on the speaking circuit in the wake of his runaway hit business book "The New Rules of Marketing and PR" (available as a Kindle book also, of course), how much more could his publisher have profited from his management as a speaker as well as from his imprinted word?

At the same time book publishers are becoming smarter about benefiting from the value of book content in pre-print communities as well. My own relationship with John Wiley & Sons has enabled content from my own forthcoming book "Content Nation" to be posted online and publisher programs such as O'Reilly's Rough Cuts are well into developing pre-print subscription communities for tech book consumers that act more as knowledge exchanges than peeks at books before publication - artist management for art still in the making, if you will. So although there are certainly exposures that publishers face via Amazon's proprietary eBook platform they are already developing more diversified revenue channels to maximize the value of their content.

Future iterations of the Kindle are no doubt going to change the shape of this debate significantly, but for now it's probably good that the intense interest in Kindles from a relatively narrow band of book readers is probably going to grow more slowly than some would think. It opens the possibility that book publishers will be able to develop an approach to eBooks that will open the marketplace to far greater competition amongst technology platform providers - and more opportunities for more ways to package and sell content on eBook platforms.

Although the Kindle itself is proprietary it is using the Sprint telecommunications company's broadband wireless network in the U.S., a strong network with standardized communications technology that could easily accommodate any number of services providing downloads of eBooks and other media. Enabling any media service to provide subscription or on-demand downloads into any device at a cost lower than typical broadband Internet services via such a network might accelerate a market for competitive platforms before Amazon gets to flood the market with cheaper Kindles at a not-so-distant future point in time. Here's hoping that publishers of books and other media jumping in the Kindle bandwagon think carefully about who should be in control of their distribution mechanism before locking themselves into being curators of content proprietary to emerging mobile platforms.