Comments on: How to build a network http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/ by Jeff Jarvis Fri, 10 Feb 2012 09:43:34 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Katharine Bernet http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-457937 Katharine Bernet Wed, 14 Sep 2011 19:20:27 +0000 http://www.buzzmachine.com/?p=3785#comment-457937 Analyzing humor is like dissecting a frog. Few people are interested and the frog dies of it. Analyzing humor is like dissecting a frog. Few people are interested and the frog dies of it.

]]> By: links for 2008-08-16 « DigiDave – Journalism is a Process, Not a Product http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-406310 links for 2008-08-16 « DigiDave – Journalism is a Process, Not a Product Mon, 21 Dec 2009 08:37:06 +0000 http://www.buzzmachine.com/?p=3785#comment-406310 [...] How to build a network Excellent piece of advice if breaking into new territory. [...] [...] How to build a network Excellent piece of advice if breaking into new territory. [...]

]]> By: links for 2008-08-16 « DigiDave - Journalism is a Process, Not a Product http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-392541 links for 2008-08-16 « DigiDave - Journalism is a Process, Not a Product Sun, 05 Apr 2009 03:15:33 +0000 http://www.buzzmachine.com/?p=3785#comment-392541 [...] How to build a network Excellent piece of advice if breaking into new territory. [...] [...] How to build a network Excellent piece of advice if breaking into new territory. [...]

]]> By: Five years of Facebook: How it redefined what we consider “news” » Nieman Journalism Lab » Pushing to the Future of Journalism http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-390228 Five years of Facebook: How it redefined what we consider “news” » Nieman Journalism Lab » Pushing to the Future of Journalism Wed, 04 Feb 2009 16:33:59 +0000 http://www.buzzmachine.com/?p=3785#comment-390228 [...] of a community or campus news organization that deals in the treasured minutiae of localized networks. And this was at least two years before Facebook’s news feed would give the concept its [...] [...] of a community or campus news organization that deals in the treasured minutiae of localized networks. And this was at least two years before Facebook’s news feed would give the concept its [...]

]]> By: BuzzMachine » Blog Archive » Hope « The Future of Print http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-388459 BuzzMachine » Blog Archive » Hope « The Future of Print Tue, 30 Dec 2008 16:25:59 +0000 http://www.buzzmachine.com/?p=3785#comment-388459 [...] Invest in the Web. “Don’t try to suck too much revenue from your fledgling network. Your Web site needs investment before it can fly… A Web revenue-growth model cannot simply be a [...] [...] Invest in the Web. “Don’t try to suck too much revenue from your fledgling network. Your Web site needs investment before it can fly… A Web revenue-growth model cannot simply be a [...]

]]> By: BuzzMachine » Blog Archive » Hope http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-388027 BuzzMachine » Blog Archive » Hope Wed, 24 Dec 2008 18:12:34 +0000 http://www.buzzmachine.com/?p=3785#comment-388027 [...] Invest in the Web. “Don’t try to suck too much revenue from your fledgling network. Your Web site needs investment before it can fly… A Web revenue-growth model cannot simply [...] [...] Invest in the Web. “Don’t try to suck too much revenue from your fledgling network. Your Web site needs investment before it can fly… A Web revenue-growth model cannot simply [...]

]]> By: BuzzMachine » Blog Archive » Google: Monopoly or marketplace? http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-382786 BuzzMachine » Blog Archive » Google: Monopoly or marketplace? Sat, 13 Sep 2008 17:26:29 +0000 http://www.buzzmachine.com/?p=3785#comment-382786 [...] he could raise rates — as eBay did once it dominated the marketplace it created (though that invited competition from Amazon, Etsy, et [...] [...] he could raise rates — as eBay did once it dominated the marketplace it created (though that invited competition from Amazon, Etsy, et [...]

]]> By: Internet Media audit http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-382557 Internet Media audit Tue, 09 Sep 2008 07:28:13 +0000 http://www.buzzmachine.com/?p=3785#comment-382557 Guys, it is amazing how markets are differents in the US and in Europe. We still need a revolution that will spread revenues from advertising to websites on a fair basis and not 70% for the media agency and some drops for the websites. A la Bastille!!! Guys, it is amazing how markets are differents in the US and in Europe. We still need a revolution that will spread revenues from advertising to websites on a fair basis and not 70% for the media agency and some drops for the websites. A la Bastille!!!

]]> By: How to build a network « Wallpaper.com info http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-382013 How to build a network « Wallpaper.com info Tue, 02 Sep 2008 13:01:06 +0000 http://www.buzzmachine.com/?p=3785#comment-382013 [...] http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/ [...] [...] http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/ [...]

]]> By: Dash Chang http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-381214 Dash Chang Mon, 25 Aug 2008 23:08:04 +0000 http://www.buzzmachine.com/?p=3785#comment-381214 I've known Tom since the early 80's. Although I admire his work, this commune-istic view of networks seems naive. 1. His loss leader approach to starting a network is one strategy; but needs to be sustained by a service where customers pay market prices. Google offers a lot of services free, but AdWords pay the bills. Further, Google optimizes to increase CPC. 2. Size for size sake works in certain industries, but not advertising nor communities. Publishing has always been about specialized niches that sustain high CPMs. Yahoo has the problem that they are one undifferentiated brand. How many advertisers want that global reach? Not many. Thus supply exceeds demand. 3. Sell at cost plus to minimize competiors. Presumably, if you are the low cost operator, like Taiwan, you win. Microsoft and Google create complexity and patents to block competitors. Drug industries hide behind regulations to protect profits. Innovation protected by intellectual property makes more sense. A network needs to bind birds-of-a-feather where community members have economic or emotional reasons to stay together. A network platform can enable thousands of communities. Low price, low margins, and growth for growth sake does not apply to network growth. Just my two-cents. I’ve known Tom since the early 80’s. Although I admire his work, this commune-istic view of networks seems naive.

1. His loss leader approach to starting a network is one strategy; but needs to be sustained by a service where customers pay market prices. Google offers a lot of services free, but AdWords pay the bills. Further, Google optimizes to increase CPC.

2. Size for size sake works in certain industries, but not advertising nor communities. Publishing has always been about specialized niches that sustain high CPMs. Yahoo has the problem that they are one undifferentiated brand. How many advertisers want that global reach? Not many. Thus supply exceeds demand.

3. Sell at cost plus to minimize competiors. Presumably, if you are the low cost operator, like Taiwan, you win. Microsoft and Google create complexity and patents to block competitors. Drug industries hide behind regulations to protect profits. Innovation protected by intellectual property makes more sense.

A network needs to bind birds-of-a-feather where community members have economic or emotional reasons to stay together. A network platform can enable thousands of communities. Low price, low margins, and growth for growth sake does not apply to network growth.

Just my two-cents.

]]> By: Steve Hochschild http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-381207 Steve Hochschild Mon, 25 Aug 2008 19:59:16 +0000 http://www.buzzmachine.com/?p=3785#comment-381207 We must remember that Tom Evslin was the original email guy at Microsoft, and he clearly learned all of this while there. Some of us remember when Tom and Microsoft destroyed the email business when they bundled their email application in with Windows for Workgroups, and within just a couple of years, the number of email user agent vendors went from hundreds to fewer than 5. His approach is fine when your goal is to be the monopoly player -- make a business at such a low margin that you drive out all the others, then reap monopoly profits. Not that this is necessarily his goal... We must remember that Tom Evslin was the original email guy at Microsoft, and he clearly learned all of this while there.

Some of us remember when Tom and Microsoft destroyed the email business when they bundled their email application in with Windows for Workgroups, and within just a couple of years, the number of email user agent vendors went from hundreds to fewer than 5.

His approach is fine when your goal is to be the monopoly player — make a business at such a low margin that you drive out all the others, then reap monopoly profits. Not that this is necessarily his goal…

]]> By: Preston http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380946 Preston Fri, 22 Aug 2008 03:11:05 +0000 http://www.buzzmachine.com/?p=3785#comment-380946 You raise an interesting point, but there's a flip side to this discussion. I remember a professor once told me: "There can be only one Wal-Mart. Only one." There can be only one low-cost provider. Everyone else needs to, if they're going to operate in a similar space, differentiate. A competitor may not be able to steal Craig's listings on cost, but someone could steal Craig's listings if they provide (differentiate with) something that customers are interested in. You raise an interesting point, but there’s a flip side to this discussion. I remember a professor once told me: “There can be only one Wal-Mart. Only one.” There can be only one low-cost provider. Everyone else needs to, if they’re going to operate in a similar space, differentiate.

A competitor may not be able to steal Craig’s listings on cost, but someone could steal Craig’s listings if they provide (differentiate with) something that customers are interested in.

]]> By: Serge Lescouarnec http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380858 Serge Lescouarnec Tue, 19 Aug 2008 06:28:42 +0000 http://www.buzzmachine.com/?p=3785#comment-380858 Jeff I like Henry's take on the online state of affairs yet I was never able to get 'BlogAds' going on 'Serge the Concierge'... (http://www.sergetheconcierge.com) OK I am a small fish in a big pond but I do not feel like 'BlogAds' always follows up on things. As for networks and all, I recently decided to give a go to Twitter and when checking your page realized that while your followers (not a sect) numbered 1400 plus, you followed only 2 people, yourself and your son Jake. I know life is busy and all but isn't it more than a bit lopsided? My 5 centimes Serge 'The French Guy from New Jersey' Jeff

I like Henry’s take on the online state of affairs yet I was never able to get ‘BlogAds’ going on ‘Serge the Concierge’… (http://www.sergetheconcierge.com)
OK I am a small fish in a big pond but I do not feel like ‘BlogAds’ always follows up on things.

As for networks and all, I recently decided to give a go to Twitter and when checking your page realized that while your followers (not a sect) numbered 1400 plus, you followed only 2 people, yourself and your son Jake.

I know life is busy and all but isn’t it more than a bit lopsided?

My 5 centimes

Serge
‘The French Guy from New Jersey’

]]> By: henry http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380811 henry Mon, 18 Aug 2008 16:30:20 +0000 http://www.buzzmachine.com/?p=3785#comment-380811 Great post Jeff. I don't get it, since we run a nicely profitable business that has sent bloggers 10s of millions of dollars. I think that other folks are greedy. We're happy at 20% (slightly higher for newer bloggers) because we're located in podunk Carrboro, NC (much lower cost of living than major metro areas), and we focus on building/maintaining relationships online, rather than employing high-churn, high-salary, low-satisfaction staff in NYC, LA, SF and Chicago. Incredibly, even Google seems to be taking close to 50% on some of its stuff. I guess they're a lot less automated than they look. Great post Jeff.

I don’t get it, since we run a nicely profitable business that has sent bloggers 10s of millions of dollars.

I think that other folks are greedy.

We’re happy at 20% (slightly higher for newer bloggers) because we’re located in podunk Carrboro, NC (much lower cost of living than major metro areas), and we focus on building/maintaining relationships online, rather than employing high-churn, high-salary, low-satisfaction staff in NYC, LA, SF and Chicago.

Incredibly, even Google seems to be taking close to 50% on some of its stuff. I guess they’re a lot less automated than they look.

]]> By: Printed Matters » Connecting the dots for AP 2.0 http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380775 Printed Matters » Connecting the dots for AP 2.0 Sun, 17 Aug 2008 22:52:54 +0000 http://www.buzzmachine.com/?p=3785#comment-380775 [...] with all news providers, big and small. Because we don’t need another walled garden. And the value of a network increases exponentially with size. I think there’s a law about [...] [...] with all news providers, big and small. Because we don’t need another walled garden. And the value of a network increases exponentially with size. I think there’s a law about [...]

]]> By: Andy Freeman http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380769 Andy Freeman Sun, 17 Aug 2008 14:57:36 +0000 http://www.buzzmachine.com/?p=3785#comment-380769 > The amazing thing to me is that the book was published in 1999, well before most people were thinking about these sorts of issues. Pricing to discourage potential competition and network effects are old economic principles. However, saying that standard economics applied to the web was an amazing thing to say in 1999. > The amazing thing to me is that the book was published in 1999, well before most people were thinking about these sorts of issues.

Pricing to discourage potential competition and network effects are old economic principles. However, saying that standard economics applied to the web was an amazing thing to say in 1999.

]]> By: Eric Nehrlich http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380749 Eric Nehrlich Sat, 16 Aug 2008 20:47:37 +0000 http://www.buzzmachine.com/?p=3785#comment-380749 I liked Hal Varian's take on this in Information Rules (<a href="http://www.nehrlich.com/blog/2008/07/21/information-rules-by-carl-shapiro-and-hal-varian/" rel="nofollow">my review is here</a>). Varian is a Berkeley professor of economics who's now Google's Chief Economist, and in the book, he makes exactly this observation that the value is in growing the network, so companies need to avoid the temptation towards greedily extracting value. He also makes the same point that trying to extract that value opens up the potential for competition. The amazing thing to me is that the book was published in 1999, well before most people were thinking about these sorts of issues. I liked Hal Varian’s take on this in Information Rules (my review is here). Varian is a Berkeley professor of economics who’s now Google’s Chief Economist, and in the book, he makes exactly this observation that the value is in growing the network, so companies need to avoid the temptation towards greedily extracting value. He also makes the same point that trying to extract that value opens up the potential for competition. The amazing thing to me is that the book was published in 1999, well before most people were thinking about these sorts of issues.

]]> By: Eric Berlin http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380742 Eric Berlin Sat, 16 Aug 2008 16:16:22 +0000 http://www.buzzmachine.com/?p=3785#comment-380742 I see Jeff, thanks. I think that in reality there are more than those two variables, but I appreciate the explanation. I see Jeff, thanks. I think that in reality there are more than those two variables, but I appreciate the explanation.

]]> By: Jeff Jarvis http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380736 Jeff Jarvis Sat, 16 Aug 2008 10:54:23 +0000 http://www.buzzmachine.com/?p=3785#comment-380736 Eric, I don't think so. Tom has that built in. There are two pricing variables: the CPM of the ad and the commission the network takes. The higher the CPM, the better for everyone; Tom argues that the larger the network, the higher the CPM can be because bigger, better advertisers can be approached. The commission is a separate line. He argues that minimizing that to maximize inventory acts to increase CPM. The separate consideration is his point about profit as a barrier. If the network takes too much commission then another network can easily start and undercut it; if it minimizes commission, then it's not worth it for a competitor to enter. Eric,
I don’t think so. Tom has that built in.
There are two pricing variables: the CPM of the ad and the commission the network takes. The higher the CPM, the better for everyone; Tom argues that the larger the network, the higher the CPM can be because bigger, better advertisers can be approached.
The commission is a separate line. He argues that minimizing that to maximize inventory acts to increase CPM. The separate consideration is his point about profit as a barrier. If the network takes too much commission then another network can easily start and undercut it; if it minimizes commission, then it’s not worth it for a competitor to enter.

]]> By: Eric Berlin http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380732 Eric Berlin Sat, 16 Aug 2008 04:34:57 +0000 http://www.buzzmachine.com/?p=3785#comment-380732 It seems to me that your argument holds if you consider all inventory to be equal i.e. an impression is an impression is... But if you bring in the factor that some inventory could be more valuable than others, and then conclude that it's possible to create value around that higher value inventory for both publishers (higher CPMs = more revenue) and advertisers (higher value ad placement = money well spent), doesn't the exact opposite of your argument start to play out? It seems to me that your argument holds if you consider all inventory to be equal i.e. an impression is an impression is…

But if you bring in the factor that some inventory could be more valuable than others, and then conclude that it’s possible to create value around that higher value inventory for both publishers (higher CPMs = more revenue) and advertisers (higher value ad placement = money well spent), doesn’t the exact opposite of your argument start to play out?

]]> By: slight.frost.byte » Blog Archive » Optimize for Growth Rather than Revenue http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380727 slight.frost.byte » Blog Archive » Optimize for Growth Rather than Revenue Sat, 16 Aug 2008 00:00:14 +0000 http://www.buzzmachine.com/?p=3785#comment-380727 [...] up-front (little revenue), the overall potential for revenue is greater due to a larger audience. Jeff Jarvis does a great job summarizing what Tom Evslin has to say about this concept, which definitely holds [...] [...] up-front (little revenue), the overall potential for revenue is greater due to a larger audience. Jeff Jarvis does a great job summarizing what Tom Evslin has to say about this concept, which definitely holds [...]

]]> By: Andrew Tyndall http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380724 Andrew Tyndall Fri, 15 Aug 2008 20:43:18 +0000 http://www.buzzmachine.com/?p=3785#comment-380724 Funnily enough, old media networks seem to follow this plan -- maximizing size while minimizing margins. It is my understanding that the broadcast television networks come close to merely breaking even in the business of selling advertising for revenue and at the cost of providing programing for their affiliates. Their business plan is that they happen to own and operate television stations in the largest and most profitable local markets. Thus their model makes money for all affiliates yet disproportionately benefits the affiliates the network itself happens to own. Funnily enough, old media networks seem to follow this plan — maximizing size while minimizing margins. It is my understanding that the broadcast television networks come close to merely breaking even in the business of selling advertising for revenue and at the cost of providing programing for their affiliates. Their business plan is that they happen to own and operate television stations in the largest and most profitable local markets. Thus their model makes money for all affiliates yet disproportionately benefits the affiliates the network itself happens to own.

]]> By: Julie Kentwood http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380723 Julie Kentwood Fri, 15 Aug 2008 19:42:11 +0000 http://www.buzzmachine.com/?p=3785#comment-380723 At what point do you switch over and start incrementally extracting value from the network? At what point do you switch over and start incrementally extracting value from the network?

]]> By: Bill Bostic http://www.buzzmachine.com/2008/08/15/how-to-build-a-network/#comment-380715 Bill Bostic Fri, 15 Aug 2008 15:30:27 +0000 http://www.buzzmachine.com/?p=3785#comment-380715 RE: event at CUNY on new business models for news Jeff, where can I find dates and pricing for this event? Or, is info unavailable because details are still being worked out? RE: event at CUNY on new business models for news

Jeff, where can I find dates and pricing for this event? Or, is info unavailable because details are still being worked out?

]]>