The Justice Department has hired a litigator to look at going after Google and its growing dominance in advertising.
This isn’t surprising, of course. It’s the yin-yang of American business: we love success stories but we hate too much success.
The problem with going after Google is that unlike Microsoft or earlier monopolies, the industries Google affects handed it its dominance on a silver platter. Google didn’t steal it away. Yahoo went to Google to be rescued from erstwhile monopolist Microsoft and to improve its bottom line by hundreds of millions of dollars. Newspapers–non-French-speaking ones at least–hire specialists to make their content more attractive to Google and happily take its ads–including this week’s announcement about Google digitizing and monetizing newspaper archives. See also this week’s announcement by NBC that it is handing over some ad inventory to Google. That’s not just about the money. It’s about bringing in a new population of advertisers that big media couldn’t serve (being too big–irony noted).
The agency side of the business, too, is eager to do business with Google. When I interviewed Rishad Tobaccowalla of Publcis’ Denou for my book, he explained that the giant agency consolidated all its digital divisions so it would have better negotiating leverage with Google, Yahoo, Microsoft, et al — and also so it would gather more data (as Google does) to learn more about users and target ads better.
But Google gobbles up advertising companies, you say. Well, its acquisition of Doubleclick was approved by the government only recently. Has Google gotten too big since then?
I’ve long argued that we do, indeed, need competition in the ad market but it’s not going to come from regulation. It’s going to come from getting off our asses and creating those competitors. I said that we need an open-source ad marketplace. Nobody’s heeded that advice. Meanwhile, Glam has built a non-Google network that has grown to gigantic proportion–CEO Samir Arora told me at a Burda party the other night that it now serves more than 80 million uniques worldwide, more than 40 million in the U.S. with brand advertisers. That is a competitor to Google.
(Full disclosure: I’m writing a book about Google, What Would Google Do? And I own Google stock.)
It’s ironic that The Nation should come out with its perennial screed against big-media, cross-media conglomeration (complete with obscene centerfold) at the same time that Tribune Company — the grandfathered forefather of local cross-media newspaper-TV-radio-cable-magazine-online-entertainment hegemony — is threatened with breakup, like Knight Ridder before it, because a warring stockholder says that synergy just isn’t working.
The media landscape is changing dramatically, seemingly on a daily basis, and what we once considered serious dangers to our democracy–things like media consolidation and the absence of balance and fairness–will become increasingly less important. We are at the beginning of the age of citizen media, where corporations can own vast, billion-dollar media outlets yet fail to control the flow and content of information. It’s quite hard to be a media gatekeeper when everyone becomes media, and that’s what we’re seeing happen in the age of blogs, wikis, social networking sites, podcasting, vlogging, message boards, e-mail groups and whatever wonderful communication technologies emerge tomorrow. Consolidation isn’t saving newspaper circulation numbers.
It’s actually kind of sad to see writers at The Nation still trying to get up a good fret over media monstrosity. [via InOpinion]
: LATER: Matthew Yglesias does the better analysis (of course):
Media concentration is, I’m afraid, one of those progressive causes I’ve never been able to get unduly worked up about. Whenever this comes up, I think back to years and years ago when I was living at home and my parents subscribed to The Nation. They printed this big chart showing how concentrated the media was in the hands of a few corporations. Or, at least, that’s what it was supposed to show. I recall having thought that the chart actually showed Big Media to be relatively diffuse, all things considered. . . .
As they’re saying-but-not-saying here [in the current Nation chart], the media’s become less concentrated. They’re up to six giants from just four — General Electric, Disney, Time Warner, CBS (which I believe is the successor to Westinghouse), plus new entrants Fox, and Viacom. So that’s six.
Six is a reasonably small number, but compared to what? What do the top six American car companies control? Oh, right, there are only two. And only two operating system makers. And so on and so forth. The tendency in any field would be for the top six firms to control a large portion of the aggregate.
What’s more, the curious thing about these six media monopolists is that between them they control zero of America’s most-influential newspapers. . . .
On top of all that, you need to consider the existence of NPR and PBS. . . .
On top of all this, the Internet is greatly enhancing peoples’ range of options. Actual “new media” — blogs, etc. — play a relatively small role in this. The main thing is that, unlike it past eras, it’s now really, really easy for somebody living in St. Louis to read The Los Angeles Times or The Boston Globe or, for that matter, The Guardian or The Independent if they’re interested in a different perspective on world or national affairs. In the more strictly entertainment sectors of the media, thanks to the iTunes Music Store and EMusic and Netflix and digital cable, it’s never been easier — especially for people living outside major cultural centers — to find an independent album or movie.
This is getting very longwinded. But suffice it to say that while I have major — major — complaints with the reality of most media content, I don’t find it especially plausible to attribute these problems to overconcentration. The media business doesn’t seem especially concentrated and it’s becoming less rather than more concentrated.
I constantly hear newspaper executives fret, “How am I going to get enough money to support my newsroom.” I did an interview about TV the other day and one of the questions was, “How are networks and producers going to get enough money to make the shows the make?”
In what business can you start your calculations with the bottom line you want to have: ‘I need to make this much money’? Doesn’t every sane business (that is new and hopeful or healthy and growing) start, instead, by saying, ‘This is my product, this is what customers are willing to pay in the marketplace, this is what it is worth, so that’s what I’ll make’?
That is the problem with threatened media businesses: They continue to concentrate on preserving their pasts, on the revenue they used to make as monopolies and megaliths in the age of big, and not on the products they create and the value they bring their customers in a new and competitive marketplace.
I wouldn’t bet stock on guys who look at their businesses from the wrong end.
The UK’s Carphone Warehouse plans to offer free broadband. [via Simon Waldman] See also today’s Times story about San Francisco’s free/paid wi-fi. There’s some hooha in there with a kneejerk story about privacy concerns:
But even before the city announced the winning bidder, privacy advocates had begun to criticize the Google approach for what they say is its potential to violate consumer privacy. Early last week, the Electronic Frontier Foundation and the Electronic Privacy Information Council released a joint report calling the EarthLink and Google proposal “privacy-invasive,” because it would involve “cookies” that track users from session to session to enable customized delivery of ads.
Like every single ad-supported site out there. Get over it. Cookies don’t have cooties. Without cookies, ads will disappear and you won’t get free wi-fi and free content.
The Times — like many people in power — seems to have trouble grasping the full impact of the internet handing control over to the people. They have real trouble turning their personal prisms around to look at the world from the bottom up instead of their usual top down. Or to put it another way, they can’t figure out anymore who’s the dog, who’s the tail, and who’s wagging whom.
Today’s quaintly late story about the internet changing politics is exhibit A; another story that’s just shocked at big things not coming from big corporations is exhibit B; and throw in there the story about the shrinking digital divide, which I wrote about below, and the paper’s amazement that the internet is growing on its own.
The problem is that they still think the internet is something the powerful use to affect the rest of us. Wrong. It’s what the rest of us use to affect the powerful.
See this, the second graph, from Adam Nagourney’s political story:
Democrats and Republicans are sharply increasing their use of e-mail, interactive Web sites, candidate and party blogs, and text-messaging to raise money, organize get-out-the-vote efforts and assemble crowds for a rallies. The Internet, they said, appears to be far more efficient, and less costly, than the traditional tools of politics, notably door knocking and telephone banks.
Note how he portrays the internet: as a tool for politicians in power. But way lower down in the story, there’s this anectode — which is the real lead — about people who won’t be used and now wield power of their own:
On the left in particular, bloggers have emerged as something of a police force guarding against disloyalty among Democrats, as Steve Elmendorf, a Democratic consultant, learned after he told The Washington Post that bloggers and online donors “are not representative of the majority you need to win elections.”
A Daily Kos blogger wrote: “Not one dime, ladies and gentlemen, to anything connected with Steve Elmendorf. Anyone stupid enough to actually give a quote like that deserves to have every single one of his funding sources dry up.”
That’s the real story, Times, and it’s only just beginning: Politics are changing not because those in power are learning to use these tools but because the people finally have these tools.
Now shift to the business story, in which Richard Siklos simply can’t compute the idea that people create things on their own because they can and want to and not because they’re hired to. He can’t comprehend the scale — the small is the new big — of bottom-up business.
There is another breed of rival lurking online for traditional media, and it is perhaps the most vexing yet: call it purpose-driven media, with a shout-out to Rick Warren, the author of “A Purpose-Driven Life,” for borrowing his catchphrase.
These are new-media ventures that leave the competition scratching their heads because they don’t really aim to compete in the first place; their creators are merely taking advantage of the economics of the online medium to do something that they feel good about. They would certainly like to cover their costs and maybe make a buck or two, but really, they’re not in it for the money. By purely commercial measures, they are illogical. If your name were, say, Rupert or Sumner, they would represent the kind of terror that might keep you up at night: death by smiley face.
Probably the best-known practitioner is Craigslist.org, the online listing site….
But this isn’t just do-goooder business. It is, instead, the realization that the politicians never owned politics and the businesses never owned the market and journalists never owned the news. The people do. And that’s damned hard for some to get their heads around. It’s especially hard for the the politicians, the reporters, the moguls — the powerful.
: LATER: Eric Norlin responds with a smart analysis. I think he’s right on all points. And he makes a point I meant to: that the reason to be cheap is to grow your network as fast and large as possible and good things will come of that. Google was free and became huge. Craigslist ditto. Eric says:
If you look at the crop of startups, you'll see two common themes: filtering and aggregation.
"Value lies at the aggregation point." - I forget who said it, but it rings in my head daily. Newspapers' value lies in aggregating readers for advertisers (not in some high-horsed journalistic elite). Google's value lies in aggregating viewers. Conferences aggregate audiences. MySpace aggregates teens. Facebook aggregates college students. O'Reilly aggregates developers. Aggregation is where the value lies. As Seth Godin said recently -- its not that the power of "mass" has lost its value, its that its much harder to find mass.
Filtering: Pure "news" (items being pulled off the AP wire) are along the same lines as stock prices, they're commodities. But filtering, perspective, a trusted voice -- that brings tremendous value. And people flock to the filters that appeal to them. Podshow filters. Newsvine provides community filtering. Digg filters. Memerandum filters. Hell, Rush Limbaugh filters. And the *filtering* layers value onto the aggregation.
The world of new media keeps focusing on "who's producing the content" -- journalists or bloggers, users or professionals, etc -- but its not about "content," its about filtering and aggregation. Therein lies the current keys to value (not that that won't change).
A version of the speech by Reuters head Tom Glocer that I lauded is now online at the FT.
While media companies are catching up with this demand for “personalisationâ€, our audiences have moved on dramatically. Now they are consuming, creating, sharing and publishing their own content online.
There were indications last year that a significant shift in the balance of power between professional content companies and home-based creators lay ahead….
But it is not just bloggers – it is citizen journalists armed with their 1.3 megapixel camera phones, people “mashing†together music and images to create new music videos, kids making their own movies and posting them on sites such as Stupidvideos.com or MySpace.com….
It is important to understand what has changed. Bloggers, after all, have always been a part of history – read Daniel Defoe, Samuel Pepys or James Boswell. The same is true for citizen journalists: just check out first-hand accounts of any big historical event. The difference now is the scale of distribution and the ability to search….
In the news industry, professional and “amateur†content combined creates a better product. It tells the story at a deeper level….
We are now at our crossroads. Old media – and I now would include the first wave of online publishing – have a choice: integrate the new world or risk becoming less relevant. Our industry must not fall into the old protectionist strategies that defined the first phase of the internet. The internet was not invented just to show a replica of yesterday’s newspaper with a few banner advertisements. We cannot be the choke-hold, blocking the new creators in a bid to protect our legacy businesses…
Tom Glocer, CEO of Reuters, is giving a keynote at the Online Publishers Association. It’s good enough to live-blog.
Glocer said a year ago, the focus of Reuters was on “the consumer as editor,” with tools such as RSS to allow consumers to consume differently. Now, it has gone far beyond that:
They’re consuming, they’re creating, they’re sharing, and they’re publishing themselves. So the consumer wants to not only run the printing preess, the consumer wants to set the Linotype as well….
Our industry is facing a profound challenge from home-created content…. If we create the right crossroads, provide the consumers with the appropriate tools… we can harnass what otherwise from the outside would look like a punk revolution….
He says that media historians will see the acquisition of MySpace by News Corp as a “turning point…. Sites like Myspace are rebuilding our world” because they provide a means for anyone who has anything to share to do so. “What we are seeing today is an almost continuing talent show.”
“Technology is creating a kind of weird, hybrid world” of mashups, he says. He recognizes a “demand for this new kind of creativity” and there is also an advertising demand for it.
: What’s great about Glocer’s talk is not only that he gets it but he gives us respect. Standing in London, he compares bloggers to the great diarists. He says that people will turn to the Rafats of the world to interpret news. He says that bloggers were important in coverage of the last U.S. election. He says that citizen journalism has a long tradition, comparing citizens’ reports of 7/7 with a survivor’s account of the Titantic crash.
What has really changed is the nature of publishing, a “Gutenbergian transformation” that involves both tools and distribution.
“If the user wants to be both author and editor, and technology is increasingly enabling this, what will be the role of the media company…?” He has three answers: Media companies will be a “seeder of clouds.” Nice analogy. I call it a magnet and would recommend that to him for he says that just creating content is not enough; they must attract the people. The second role is to be a “provider of tools… We need to produce open standards and interoperability to allow” disparate people to create content of disparate types. “Let’s not make the same mistakes newspapers did with the protectionist online strategies that characterized Internet 1.” By that he means not recreating the old content in the new medium. The third role, he says, is that media companies will be “filter and editor.” He says that “the good stuff will rise to the top” online.
: Glocer uses the Tsunami and the Concorde crash to show how citizen journalists and professional journalists together tell the story more quickly and completely. “There’s no monopoly on being in the right place at the right time.”
“We can’t be a chokehold in a desparate effort to close the digital pipe,” Glocer says, arguing that media companies must not try to protect what they have by restricting those who come next.
: Speaking to fellow media companies, he concludes: “We are the go-between providing the structure and support… between the information provider and the consumer, even if today they are the very same person.” He tells them that trust is critical and so he argues that in a world with so much information, “the consumer gravitates to trustworthy brands.”
He asks what this means for Google and China and answers the question by not answering it: “Reputation is hard-won and easily lost.”
And he urges these media companies to understand and encourage citizen media.
: I get up to ask a question about copyright and remixing: He understands the value of being part of the converstation, part of the remix and so where does he think the line is in use of his material? He says that in the U.S. there is a fairly clear line in fair use but there is a question about objectionable use. He says content creators should have the right to set appropriate use; he’s endorsing Creative Commons (-like) licenses. He says that Reuters puts its RSS feeds out in the hope that bloggers will use them and include them in the conversation and if we quote a story they’re happy.
Rich Karlgaard, the publisher of Forbes, who’s on the stage with Glocer, says he now reads Real Clear Politics and thus reads the sources of the opinions there less and he asks, “Are these guys friends or foes?” Glocer says they could be a foe to newspapers but they are a friend to readers.
In a related question, Karlgaard — looking for the dark side of the cloud still — asks whether bloggers et al are “a threat more in the loss of readers or the loss of revenue.” Glocer answers revenue and he says that bloggers are helping media find a new and younger audience. I think that’s also the right answer to the question about aggregators.
: LATER: Karlgaard leaves a comment emphasizing that he’s not a gloomy protectionist; he was just being a moderator.
Reading the agenda of the World Newspaper Congress in the Kremlin — the Kremlin! — in June, I sense foreboding. Some of the sessions:
Should newspapers welcome citizen journalists? … But what are the consequences for quality newspaper journalism? By inviting their public to participate, are newspapers harming their primary function or is citizen journalism a useful means of maintaining relationships with the “free generation?” …
One of the most pressing dilemmas newspapers face today is how to integrate audio, video and interactivity into their news production. Should print journalists be trained on multiple platforms? Or should newspapers join forces with other media companies to provide multimedia news? …
Web portals and news agencies: new threats to newspapers? New media mean new competition for newspapers. News aggregators lead readers to other sources and Internet companies produce original content. News agencies directly access the public though their websites, skipping the newspaper middleman. …
Lessons from the Mohammed cartoon clash… Six panelists will discuss if there are limits for press freedom and how media responsibility can work in a globalized world. …
Media credibility: should newspapers rewrite editorial guidelines?…
Not a club of happy campers, I’d say. That’s all from the forum, which seems focused on the newsroom. The congress — which seems focused on the business side — concentrates, more wisely, on innovation. I like the title of this talk by Carolyn McCall, chief exec of Guardian Newspapers (where — full disclosure — I write and will consult): “How Guardian Newspapers Limited changed everything except our values in just 12 months.” And I’d say some new values are fair game, too. And I’d say the editors should be concentrating on innovation as well.
Stowe Boyd has a smashing post today suggesting a shift form venture capital to advice capital. As VCs find themselves unable to throw big buckets o’ money at ever-smaller, nimbler, quicker startups, it becomes impossible for them to manage their real assets: time, distraction, and knowledge. I think that this provides opportunties for strategic investors who have more than money to offer and also for smart, independent people (such as bloggers, Boyd suggests) who can offer advice, connections, and questions. The challenge is to make this more than a show advisory board but a real relationship and a longer-term commitment for both than old-style consulting (thanks to payoffs in long-term equity). I’ve started down that path with a few companies myself.
Call me a populist and a utopian and I’ll say thanks.
There has been much linking and buzzing about Andrew Keen’s militantly snobbish piece in The Weekly Standard in which he bemoans the internet and web 2.0 as a geeky rendition of communism. He reveals a sort of neoneoconservatism that wraps back around to the days before liberals became cultural snots and conservatives tried to act populist and class-blind, the days when conservatives where elistist power hoarders in small, closed societies of privilege.
This is just the sort of ridiculous piece that gets links and I don’t know why I’m falling into the trap except that it’s just so laughably insulting to the entire human race that it makes me feel as if I am Mr. Matter meeting Mr. Antimatter here.
My view of cultural weltanschauung was transformed in the mid-80s, when the remote control took over half of American couches and the cable box and VCR gave us choice — and, lo and behold, when given the chance to watch good shows, we did. It turns out that we do, indeed, have taste and TV, of all things, proved it. I came to see that if you are not a populist, then you cannot believe in democracy or free markets or education or reform religion or education: Why bother with the people if the people are fools? Those technologies gave us control over the consumption of media and the internet gives us the means to create media and that’s what Keen dreads but I celebrate.
In web 2.0, Keen sees the means of flattening culture. I see the means of the people speaking. That’s not communism. That’s democracy. That’s freedom.
Rather than Paris, Moscow, or Berkeley, the grand utopian movement of our contemporary age is headquartered in Silicon Valley, whose great seduction is actually a fusion of two historical movements: the counter-cultural utopianism of the ’60s and the techno-economic utopianism of the ’90s. Here in Silicon Valley, this seduction has announced itself to the world as the “Web 2.0″ movement…. This Web 2.0 dream is Socrates’s nightmare: technology that arms every citizen with the means to be an opinionated artist or writer.
The means to speak.
So what, exactly, is the Web 2.0 movement? As an ideology, it is based upon a series of ethical assumptions about media, culture, and technology. It worships the creative amateur: the self-taught filmmaker, the dorm-room musician, the unpublished writer. It suggests that everyone — even the most poorly educated and inarticulate amongst us — can and should use digital media to express and realize themselves. Web 2.0 “empowers” our creativity, it “democratizes” media, it “levels the playing field” between experts and amateurs. The enemy of Web 2.0 is “elitist” traditional media.
Amen. But, again, do not assume that everyone who uses these tools wants to be published in The Weekly Standard. What you see is not a mass of minimedia. What you hear is the people, talking. And if you refuse to listen, you will make a rotten capitalist, journalist, politician, statesman, cleric, teacher, or neighbor. Keen hears the voice of Marx in Kevin Kelly fretting about “Mozart before the technology of the piano… Hitchcock before the technology of film. We have a moral obligation to develop technology.” Keen says:
But where Kelly sees a moral obligation to develop technology, we should actually have — if we really care about Mozart, Van Gogh and Hitchcock — a moral obligation to question the development of technology.
The consequences of Web 2.0 are inherently dangerous for the vitality of culture and the arts.
No, it is inherently dangerous for the business of those who used to control the means of creation and distribution. And that is Keen’s real fear:
Traditional “elitist” media is being destroyed by digital technologies. Newspapers are in freefall. Network television, the modern equivalent of the dinosaur, is being shaken by TiVo’s overnight annihilation of the 30-second commercial. The iPod is undermining the multibillion dollar music industry. Meanwhile, digital piracy, enabled by Silicon Valley hardware and justified by Silicon Valley intellectual property communists such as Larry Lessig, is draining revenue from established artists, movie studios, newspapers, record labels, and song writers.
Is this a bad thing? The purpose of our media and culture industries — beyond the obvious need to make money and entertain people — is to discover, nurture, and reward elite talent. Our traditional mainstream media has done this with great success over the last century.
Traditional, controlled, centralized, elitist media that gave us The Beverly Hillbillies and Oliver Stone movies and Oprah and monopoly newspapers and Mary Higgins Clark books on the successful end… and unread literature on the unsuccessful end.
In the Web 2.0 world, however, the nightmare is not the scarcity, but the over-abundance of authors. Since everyone will use digital media to express themselves, the only decisive act will be to not mark the paper. Not writing as rebellion sounds bizarre — like a piece of fiction authored by Franz Kafka. But one of the unintended consequences of the Web 2.0 future may well be that everyone is an author, while there is no longer any audience.
Aha. And there is Keen’s other essential fear: that is voice will not rise above that of the masses. But he does not have the courage not to speak. He blogs and podcasts. Heh.
: It’s no surprise that fellow digital snot Nicholas Carr agrees with Keen but Matthew Ingram does not.
: And a sort of moral opposite to Keen’s argument is the wail we hear from some quarters that now the people, empowered, are turning into gatekeepers, to which Doc applies proper perspective.
I haven’t watched the Olympics or heard the slightest buzz about them this year. And I’m certainly not alone, as American Idol and even Grey’s Anatomy beat the games. The Times talks about NBC’s weakness and others’ counterprogramming but I think it’s a bigger story than that, about:
* The end of the Big Event — we’re no longer captive to the coverage or the hype because we exercise ever-increasing choice. This doesn’t mean there will be no Big Events (see: SuperBowls) but there will be fewer.
* The ubiquity of instant information — media no longer controls the timing of the story and the basic news is a commodity available anywhere immediately.
* The primacy of the niche — the Olympics are, in a sense, the ultimate niche event as some watch curling and some watch ice-dancing and nobody wants to be forced to watch it all and that is the natural state of media.
* The disillusionment with Olympic hype — we don’t buy the narrative of nobility as scandals and greed — reality, in other words — take over.
The value of the Big Event will continue to decline as the value of big declines.
: LATER: Quickly, good comments are coming in on fatigue with both NBC and the Olympics.
