BuzzMachine

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.

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.

Having been sent into podcast orbit by the Guardian, Ricky Gervais is now planning to charge for his show via Audible. Hmmm. I enjoyed it but I’m not sure I’d buy.

I got a preview of Michael Arrington’s Edgeio — the classified system for the distributed future — and I think it is more important than it looks.

Edgeio as it stands is pretty simple: You tag a post on your blog “listing” and Edgeio will spot it and add it to its data base. You add more tags (e.g., “for rent” and “vacation”) and your post/ad will appear in the appropriate categories. Edgeio will allow you to come in and claim your blog to be able to get direct communication from respondents and, eventually, to upgrade your ad via typography and graphics and preference (I hope I got that right). This is just a start but it is a proof of concept of a new world. I’ve been waiting for someone to do this. Arrington has.

I’ve been writing for a long time that the future of classified advertising — and more of media — is distributed. That is, you won’t need to go to a centralized marketplace — the newspaper or even Craigslist or Monster — to let the world know you want to sell or buy or find something. Instead, you’ll be able to put your listing up anywhere with proper tags and then specialized search engines, like Edgeio and Oodle, will find them so buyer and seller can find each other in a distributed marketplace with far less friction and far more control at the edges.

Note well that Arrington is also setting the early standards for tagging ads so they can be found. I believe that he also needs to concentrate on putting data within ads, not just on top of them (e.g., “languages spoken = German, C++”) so more effective searches and matches can take place. Google Base may do this, but for it to be effective, the tags need to be open. What we’re really headed for is microformats and a structure in which people swarm around tags with efficiency so they and their stuff can be found. It works in Flickr and Del.icio.us and will certainly work in marketplaces where money matters.

As friction is taken out of the marketplace — as newspapers, Realtors, car dealers, eBay, and others who have controlled our information are undercut by free and open standards — there is a need to add value back into transactions. Craig Donato of Oodle — the other Craig, the one who will cause more change in the newspaper industry than the first one — is eloquent on this, pointing out that the marketplace still wants such things as anonymity to enable transactions and authority to vet ads and promotion to market them. Edgeio and Oodle — not to mention Indeed and Simply Hired and even eBay and many other comers — will try to add back some of these functions. I argued the other day that we will also need some physical-world functions, like concierges to handle house tours for far less than real-estate agents charge (cue defense wailing by Realtors here.)

: OK, but this is bigger than classifieds. It’s bigger in two ways:

: First, this is really about control. Realtors and multiple-listing services act as if they own our for-sale listings. But the truth is, that’s our information; it’s data we create and we own that we lend to these agents if they perform a service for us (or because they hold a monopoly on that service today).

I was talking about this with Seth Goldstein of AttentionTrust and Rootmarkets the other day: We own not just our attention data — what we look at, what we do, the things that Seth works in — but also have an even greater proprietary interest in the transactions we create. This holds if we are a prospect to buy a house and if we are selling a house.

The natural state of the marketplace should be that we control that information at the edges — buyer and seller — and that others join in that transaction only when and if they add value, such as the functions I listed just above. This will make for less friction and a more efficient marketplace.

It will also make for a lot of unemployed middlemen. The newspapers and Realtors that charged us too much for too little for too long will be knocked aside at the first opportunity.

: Second, this is also about content … and about people. Everything Edgeio does for classified ads, it — or someone — could do for, say, local restaurant reviews. Rather than relying on one restaurant critic for a paper to tell us what’s good and rather than trying to get all the diners out there to come to a centralized marketplace of reviews (see the late Abuzz et al), we should be able to write our reviews on our blogs, under our identities, and have them found with all the other reviews. That can occur thanks to tagging. This is what I hoped (incorrectly) that Dinnerbuzz would do, though I explained my wishes here.

It’s about people because identity matters: We want to know who is reviewing the restaurant or selling the house or seeeking the job. Verified identity and trust, I believe, will be the next huge frontier of business online. More on that later.

And it’s about people because such means of tagging and searching as Edgeio enables will also help people find each other. I wrote about this long ago, inspired by David Galbraith’s one-line-bio tag. See also Consumating.org, where people tag themselves.

See, this tagging thing is about more than bookmarks and coolness. They help reorganize the world and its relationships.

That’s why I say that Edgeio is a big deal, because it begins to enable this new world.

: A few of my posts are here, here, here, here, here, here, here, here, here, here, here, here….

: [DISCLOSURE: Michael Arrington and I are each aiding a startup. I gave him my two-cents about Edgeio. He once gave me a Techcrunch T-shirt. We link to each other. He held a spot for me at the lunch table at Web 2.0 And aren't these disclosure statements getting a bit ridiculous?]

: SPEAKING OF TECHCRUNCH: I see that Arrington will critique presentations by 10 companies at Supernova.

: LATER: Note good comments, including one from none other than Craig Newmark.

Drat. Carl Icahn gives up his effort to break up Time Warner. I talked with some big-business guys who’ve worked atop and with big-media companies after Icahn’s report on TWX came out and they agreed it was “80 percent right.” But now the company will blob along with a few more minor changes, a few baby steps in a world that needs giant steps. Damn. My FU money keeps telling me to FU.

Check out this cool German yellow pages: an aerial photo-map application in which you can zoom in on any ‘hood and pinpoint businesses and then make a free phone call to them. Very local and nicely done. [via Fabian Mohr]

Harper Collins is touting the fact that it put up Bruce Judson’s new biz book for free online with ad support (not tons of ad support, though: Yahoo text ads). Says the Harper press release:

Each page of the book’s text will be indexed for search engines and accompanied by contextual ads served by major search companies. Additionally, the site will include a link to an online bookseller where consumers can buy a copy of the book.

The permalinks within the book are the more important part of this, as far as I’m concerned. More on that later.

Some laughed when Bob Pittman bought controlling interest in Daily Candy for $3.5 million. Now, says the Journal, it will sell for $100 million.

Without costs for printing or the need for much editorial product, Daily Candy boasts margins of nearly 60%, say people familiar with the matter. The hope for 2006 is that the business will produce revenue somewhere less than $20 million, with earnings before interest, taxes, depreciation and amortization in the low-teen millions, these people say.

There’s a syncopation at work here. Email is still hot with advertisers, who finally understand it, and so they value it and pay. They will understand and value the distributed web next.

The Wall Street Journal tries to find a story in bloggers being on the advisory board of FON and blogging about it but they don’t come away with much because most of those bloggers disclosed that they were on the advisory board.

This raises a question about conflict of interest — a question with a pretty simple answer: Disclose.

But it raises a bigger question about whether all these bloggers are trying to be journalists. They’re not. Some are just people. Some are advocates. Some are journalists. Newspapers tend to think that if it has words it must be somebody trying to be like them. But that’s not always the case and it’s a mistake to think that all bloggers are trying to be minimedia. They are what they are: people.

And those people do, indeed, need to care for their credibility. If a neighbor told me to go buy tile at a great store and didn’t tell me he owned a piece of it, I’d be pissed if I found that out after I had a problem with the place; I wouldn’t trust his next recommenation much. Credibility and trust matter in life as they are supposed to matter in journalism. Trust is the organizing principle of life.

But that doesn’t mean that we all have to take some journalistic vow of uninvolvement. What, David Isenberg can’t both write about open networks and be involved in them? Of course, that’s ridiculous. David Isenberg has a stance on networks and I expect him to live and talk from that perspective.

Similarly, considering my health hiccup of late, I’ve been reading lots of sites and blogs and articles and PowerPoints by lots of people, including some from the company that makes the drug that I’m taking now. I know their perspective. I take that into account. But I find them all valuable. In fact, I find what some of the affiliated people have to say more valuable than some of the unaffiliated precisely because I do know their perspective.

The secret to this is disclosure. And the irony of this is, of course, that journalists are the worst at disclosing. They think they shouldn’t or don’t have to but they are the ones who demand that everyone else should disclose. Doctor, take your own medicine.

: Don Dodge also writes about how much easier it is to launch a company today in part because you don’t have to do through the gatekeepers of the press. Witness the launch of CoComment this week, upon which I commented along with many others. They launched via blogs and they got help doing that from the guy who understands spreading a message via blogs better than most anyone: Hugh MacLeod. Says Dodge:

We now live in a meritocracy. Money, VCs, and the press no longer decide what will be successful. Great products/services with intuitive designs that solve a real problem win.

The people who are in the best position to know what’s good are often those are most deeply involved in the arena a company is entering. Once I know their relationship, I can judge what the say accordingly, can’t you?

: And here is my disclosure.

: LATER: David Weinberger responds to the article. He’s nicer about it than I would have been. But then, he’s nicer than I am.

: Doc has links to much more discussion.

Paid Content is reading the giant Lazard report urging the break-up of Time Warner so we don’t have to. Here’s The Times coverage. And Gawker quotes Michael Wolfe’s Vanity Fair column arguing that Time Warner doesn’t have a reason to exist.

In some sense, the best that people can say about Time Warner is it is somehow not like other companies—which are fundamentally about ownership and control. It’s a postmodern entity: the inevitable result of consolidation is that everything is connected in such a tortured and ham-handed way that nothing is quite connected….

No investor, man on the street, politician with his finger in the wind, or employee would tell you differently: Time Warner, along with all the other centralized, vertically integrated, horizontally organized, multi-platform-function media companies, is just too big. The idea of agglomeration without limit turned out not to be such a good one. A no-brainer bad one….

There may be nobody who actually believes in big media anymore.

And this, folks, is why I do not think that media consolidation is an evil ready to eat up the world. Media consolidation makes companies too big and too dumb and the marketplace will take care of them.

I can’t wait to get my proxy to vote on Icahn’s efforts to break up (AOL) Time Warner. I’ll vote yes.

Steve Case wrote a Washington Post op-ed yesterday that made the lead of the front page of The Times today, pushing for breaking up the merger he made.

Pardon me for being just a little cynical, but the Time Warner stock I got while working there, which I stupidly held onto, was the FU money that F’ed me. And Steve Case is greatly to blame. He is the snakeoil salesman who sold a bill of goods — a company whose strategy he neglected — to the gullible, directionless, frightened fools at Time Warner.

Yet in the Post op-ed, Case is incredibly unselfaware. He paints AOL is the victim in the worst merger in history. And he doesn’t bother taking for engineering that failure.

While most criticism of the merger has focused on how it has failed to yield the expected benefits for Time Warner, it is worth noting that the combination has not helped AOL much either. Some benefits that AOL expected — such as replacing Road Runner, Time Warner’s broadband cable service — did not materialize. Meanwhile, unexpected roadblocks — such as internal pressures slowing AOL’s efforts to make Internet telephone service commercially available — unfortunately did. Instead of propelling AOL to new heights, the association with Time Warner has weighed AOL down, while its competitors, such as Google and Yahoo, have made important strides forward.

Case argues that Time Warner should be split into four parts: cable, publishing, entertainment, online. I actually agree on that score, as I agree with Carl Icahn that a drastic and clean split has to be made. Richard Parsonsis taking the baby steps that have always been characteristic for the company: He hinted at selling AOL, which was only a feint, and then at selling a piece of AOL, also a feint, to try to raise the value of an ad/distribution deal with Google or MSN. He doesn’t do the strategically bold thing. The last strategically bold thing this company did was merge with AOL. Ah-hem. The last strategically bold thing they did before that was merge with Warner Bros. and the only reason that worked was because there was a mogul, Steve Ross, truly in charge of the company. After that, the company was not run on vision. Instead, they thought it would be run on cooperation … in a culture where everyone hates everyone else. They still haven’t figured out how to spell sinergy synergee cynirgy synergy. So without a mogul truly in charge — a Ross or a Murdoch — the only sensible option for Time Warner is to break it up.

And the day that happens, I’ll sell my stock as fast as I can. I’ll be more than happy to sell that AOL stock to Steve Case. That would be justice.

: I got a great hoot out of this: My Dell Hell saga is now the subject of a white paper by three UK PR, marketing, and monitoring firms. It’s a PDF, even.

I’m not sure I understand their methodology but they profess to find a new measure for an “issue influence index” and they say that Buzzmachine is influential in impressions of Dell customer support. They say that through their calculations regarding searches on Dell customer service…

a) Jeff Jarvis’s Buzzmachine is the key online source for those who have a negative perception of Dell’s customer service;

b) Its influence is enhanced by support from a closely allied group of bloggers;

c) Dell’s own influence on the topic of its poor customer service is weak; …

e) Taken all in all, Jeff Jarvis’s Buzzmachine is the eleventh most influential voice on Dell’s customer service in general….

That’s a lot of fun, but I don’t buy it. I don’t think I influenced a thing. I do think that I happened to be a magnet for an apparently unlimited number of unhappy and frustrated Dell customers who were already there with lots of pent-up anger (and the parade doesn’t end; I still get emails and comments and links from Dell victims every day, though there’s really nothing I can do for them).

I was merely a leading indicator of the problems that had built up in Dell’s customer base with its unreliable products and unsatisfying service. I could have put my story out there and no one could have responded. Instead, hundreds responded. When you saw that, folks, you should have sold your Dell stock. Fast.

: See also Thomas Hawk’s story of his complaints against a New York camera story that mushroomed with stories online — some of which referred to my Dell Hell — and attacks against the store’s site and phones, apparently by fellow bloggers. Hawk doesn’t endorse that. Neither do I. Nonetheless, every customer-facing service and brand has to learn: We have more friends than you do.

: And while we’re on the topic of pissed off consumers getting their revenge… Nick Denton launches his newest blog, Consumerist, for shoppers with bad attitudes. It…

…hates paying for shoddy products, inhumane customer support, and half-assed service….

The Consumerist will highlight the persistent, shameless boners of modern consumerism — and the latest hot deals, discounts, and freebies around.

Join us. You’ll tell us when you’ve been royally screwed by yet another company, and we’ll channel your rage. Together we will storm the revolving doors of faceless corporations to call them naughty words for genitals, and they will begin to fear us.

The Consumerist. Capitalism is broken. We’ll help you fix it.

: LATER: When you click on this link, you will see how it is a perfect circle, jerk.