Monday, December 20, 2004

Woolly mammoth fights back

America Online may be losing millions of dial-up subscribers a year, but it remains a formidale giant with (at last quote) 22 million still-paying customers and some 100 million visitors to its site each month.

The folks at AOL know they are ticketed for the High-Tech Tar Pit if they don't get beyond the dial-up business that is rapidly being eclipsed by faster and increasingly cheaper broadband connections provided by cable-TV and phone companies.

Rather than fighting the inevitable drain of customers, AOL execs wisely have embarked on a strategy to reinvent the company as an ad-supported collection of mondo content portals, as described an article at MediaPost. To wit:

AOL runs some of the most frequented properties on the Web. Data from comScore-Media Metrix as of November show that AOL Radio lured 7.6 million visitors, ranking No. 1 over Clear Channel; Moviefone scored 10.3 million visitors; CityGuide had 9 million; and AOL Living racked up 10 million, a gain from the 8 million it attracted in October. AOL Music, one of the company's programming success stories, ranked No. 2 in November behind Yahoo's Launch with 14.5 million visitors--up 4.5 million from October, according to comScore data. With sibling properties Winamp and SHOUTcast, AOL Music had 16.2 million unique visitors in November; Netscape pulled in 17 million visitors.
With all those eyeballs and a rich library of content from Time-Warner, AOL remains a potent woolly mammoth.

Friday, December 17, 2004

eBay bites want ads - again

Angling to take a further chunk of the classified-ad business of newspapers, eBay is buying Rent.Com for $415 million. Rent.Com has a great URL and solid business booking $40 million in annual sales, but eBay's marketing muscle will significantly elevate Rent's profile, market share and top line.

For years, eBay has plundered the "for sale" section of newspaper want-ads, peddling everything from autos to a $28,000 grilled-cheese sandwich supposedly featuring a miraculous image of the Virgin Mary. Sites like Realtor, Monster and Craig's List have taken additional gulps out of the business that used to represent 40% of a newspaper's sales and half its profits.

Earlier this year, eBay acquired a 25% stake in Craig's List to encourage mutual "creativity" between the online powerhouses. Stay tuned...

Do-it-yourself news

Grassroots newspapering may not be the hottest thing since the invention of movable type, but it is starting to take root. There are several variations on the do-it-yourself theme, but it goes something like this:

You create a web site that not only invites, but encourages, readers to contribute their own articles, pictures, audio and video. The content either is or isn't edited by a gatekeeper. And everyone who visits the the site is encouraged to add, subtract or detract from the posted info.

Two up-and-runnning -- actually, more like up-and-crawling -- DIY sites illustrate the concept:

The first is, the beta version of a do-it-yourself online newspaper that is an offshoot of the well-trafficked Wikipedia, a rather ambitious online encyclopedia written entirely by volunteers who take the time to author articles and/or amend those written by others. Even though there are no editors to police the content, the few listings I sampled seemed to be surprisingly accurate, objective and well written.

Visiting WikiNews for the first time, I cribbed from the New York Times to refresh an outdated article on the Ukraine election, ethically attributing the new stuff to the Gray Lady. When I clicked the button, the article published instantly, remaining on the site for a couple of days until it was overtaken by events. As an inveterate editor and busybody, I was tickled by the ease with which I could hijack the story. But I get chills over the obvious potential for abuse.

MyMissourian has a more modest mandate than covering all the world's news all the time. It publishes "News of Mid-Missourians by Mid-Missourians." The lead story today is about Rita Preckshot being named citizen of the year, accompanied by a classic grip-and-grin photo. Although MyMissourian depends on reader-submitted articles and pictures, the content is screened, and presumably edited, prior to publication. This is a journalistically superior model that won't scale if the idea catches on in a big way. Even if the flow of in-bound content is less than torrential, a responsible adult will have to be engaged to mind it.

Speaking of large-scale grassroots news projects, a new site called Backfence is planning to launch early next year in the Washington (D.C.) market. Backfence hopes to become the authoritative source for chicken-dinner news in the affluent D.C. suburbs. Revenues would come from selling ads to local merchants, who can't afford to advertise in the big media and would be insane to do so if they could.

If the Backfence pilot is successful, the idea will be exported to "16 other metropolitan areas over three years, with 10 town-size sites in each market," says CEO Mark Potts, a feisty former Chicago newsman who went on to run new media ops at the Washington Post, Cahners and elsewhere. (Although WashPost won't cover the news that Backfence will, they did cover Mark. Click here to read all about it.)

If Mark has his way, big-time media execs eventually will be forced to choose between joining the grassroots movement or staying lost in the weeds.

Thursday, December 16, 2004

Overshadowing Shadow Net

Yahoo is going to start presenting live, local, custom-generated traffic maps on its web site, creating more heartburn for media execs than two miles of gridlock.

First, Yahoo will compete with Shadow Traffic and others who bulletin radio listeners every eight minutes on fender benders, overturned beer trucks and mattresses on the interstate.

Second, it will provide newspaper readers, radio listeners and TV watchers with another reason to tune into Yahoo (vs. traditional media) for their local news.

Third, it will give local advertisers a new, efficiently targeted and high affordable venue, challenging the CPMs and share of traditonal media.

Honk, if you love Yahoo.

Whole lot of blogging going on

With 5 million or more blogs clogging cyberland, it is a wonder that "blog" was the most frequently researched word this year in Webster's Dictionary. You'd think most everyone either penned or read a dandy, self-published online journal like this one.

Wait a little longer, and just about everyone will. Researchers at Pew Internet & American Life, a genuinely unbiased organization, reckon that 15,000 new blogs are being launched each day. Other public-opinion poohbahs project there will be 10 million of them by the end of '005.

You don't have to author a blog to add your voice to the Net. By posting pictures, responding to surveys, adding opinions to consumer sites and in many other ways, some 53 million Americans, or nearly 20% of the population, have posted content of some sort on the Net in the last year, according to Pew.

With all due respect to the original Napster, spam, online porn and the Drudge Report, blogs really are the most significant development to hit the Net since Al Gore invented it. That's because the blog is the first medium truly native to the Net.

Napster didn't create the idea of stealing music; it merely scaled up distribution. Spam is just stamp-free junk mail. Online porn is a faster, better, cheaper incarnation of the world's second-oldest profession. Drudge reminds me of the seedy-looking guys with vacant eyes who used to scream at no one in particular from a soapbox in the park. He turned the Internet into his bully -- and I do mean bully -- pulpit, and saved his pipes in the bargain. Notwithstanding, the traffic at his racy soapbox sometimes runs neck and neck with the New York Times as one of the 200 most-visited sites on the Net. (On a slow day, Drudge still is among the 500 busiest sites.)

Blogs are the first truly innovative development in the short, lively history of the Internet, because they simply could not have been possible without this technology.

Prior to the Internet, the power of the press, to quote A.J. Liebling, belonged only to those who owned one. In the olden days, you could type up a fistful or carbon copies or run off a few hundred mimeo sheets, but how would you distribute them? How would you know who was interested? And, significantly, how would they know about you?

The Net changed all that. No sooner did blogging catch on than a host of smart engineers began figuring out ways to track and index the blogosphere, much as Google has indexed the web and now modestly plans to digitize all the world's books. Blog indexes create a worldwide, 24/7 audience for a mega-tsunami of continuously refreshed (and occasionally refreshing) information. So stupendous is the power of the web that someone, somewhere actually may be reading this!

Beyond solving the research and distribution problem faced by wannabe publishers, the web enables near-instant response from a world full of eager blogophiles. With their active participation -- for good or ill -- a story can take on a life of its own. Blogs propogated the cheesy charges against John Kerry by the Swift Boat Vets for "Truth" and they outed Dan Rather for foolishly mistaking a contemporary computer printout for a 1970s-era typewritten memo.

Recently, a self-appointed cyberposse investigated a businessman suspected of swindling several thousand dollars from his customers. I am not going to link to the site, because I don't know if it is true. And that underscores a scary dimension of blogs: Lots of people accept what they read as fact, regardless of the source.

With the publication of information turning into a free-for-all, news, as we used to know it, is corrupted by rumor, urban legend and outright cynical manipulation for fun and profit. As people become their own editors, which admittedly is well within their rights, they appear, sadly, to be navigating to superficial, trivial and base topics. In short, this may not be an uptick in our collective intellect.

Like it or not: The beauty (and slight terror) of the Internet beast is that it cannot be contained. It will grow inexorably, keystoke by keystroke, developing a "mind" of its own.

Just like Hal the computer in "2001: A Space Odyssey."

Wednesday, December 15, 2004


Have I developed a late-life case of ADD or have the editors of the New York Times lost it? (Yes, I recognize those possibilities are not mutually exclusive.)

The ledes (aka first paragraphs) of a growing number of stories in the Times consist of labyrinthine constructions of dependent clauses and phrases that force a reader to stop short, back up and take a second running plunge into the rhetorical thicket. Sometimes, it takes two or three attempts to navigate the treacherous tangle of comma-laden asides, qualifiers, and attributions. This is the top of the story that set me off yesterday:

In June 2000, two months before Bernard B. Kerik was appointed police commissioner, New York City's top investigative agency learned that he had a social relationship with the owner of a New Jersey construction company suspected of having business ties to organized crime figures, city documents show.

Back when I was a lad, the goal was to keep the lede to 30 words (or less) and to construct it as a simple, declarative sentence pointing up the significance of the subject at hand. The lollapalooza quoted above, which is not necessarily the longest and most tortured construction of the day, weighed in at 46 words (minus the B. in Bernard B. Kerik). Here's how to make the point in 30 words (including the B.):

Two months before Bernard B. Kerik was appointed New York's police commissioner in 2000, an investigation found he had a relationship with a man suspected of ties to organized crime.

The thing that makes this astonishing/amusing/ironic is the fact that the Times prides itself on being an "editor's newspaper" employing prides of green-eyeshade guys to ensure unimpeachable quality. From the looks of things these days -- especially, it seems, since the Jayson Blair unpleasantness -- the quality-control crew is grinding the bejesus out of the writing.

The alternative to an "editor's newspaper," as you might surmise, is a "writer's newspaper." Here's the difference:

At a "writer's newspaper," the editing of articles is kept to a minimum, with stories checked for cohererence, balance, spelling, punctuation and, insofar as possible, facts. Best case, stories written by good writers and edited by good editors are left pretty much intact, conveying their spontaniety and clarity. The downside: With checks and balances kept to a comparative minimum, bad work can make its way into print. Sort of like what happened with Jake the Fake at the NYT.

An "editor's newspaper" like the Times enforces a higher degree of quality control by submitting an article to a many-tiered hierarchy of newsroom elders, who -- increasingly removed from the action, the story and the writer -- exercise the sort of objectivity, rigor and distance that we wish Merck had applied to Vioxx and the Times had applied (despite urgent alarms by my astute friend, then-metro editor, Jon Landman) to Jake's fake stories.

I got a glimpse of life at the Times several years ago, when I was kindly invited for a job interview. They had editors upon editors upon editors, each engaged in an all-day, half-the-night orgy of nitpicking and second-guessing the reporter and each other. "This is an edited paper," said the Senior Editor who was my host for the day. "We make no apologies about it." I never was seriously tempted to join in the fun, but my decision went platinum when I was told by another Senior Editor: "We want to hire the kind of people who would be willing to jump out that window if they could just work at the New York Times."

Look before you leap.

The little ads that could

Those goofy little text ads next to your Google search represent a rapidly growing $4 billion industry, according to a new study from the Search Engine Marketing Professional Organization, another unbiased group if ever we saw one.

Although these four-line, all-type ads don't have the same graphic appeal as a Macy's double-truck* ad for women's underwear, advertisters love them because they are highly targeted and their performance is instantly measurable. Best of all, they provide absolute, fine-grained control: You can change the copy and turn them on and off at will.

Advertisers even can put their ads opposite a search for their competitors. Thus, Canon can buy an ad next to a search using the key word "Nikon." This practice was challenged in the courts but the judge said it was OK for the fun to continue.

* A double-truck ad is two full facing pages in a newspaper.

Tuesday, December 14, 2004

Leaking readers (An ongoing series)

The Online Publishers Association, an unbiased group if ever there were one, recently completed a study that quantifies how newspapers have been marginalized by the Internet, TV and other competing media.

A mere 3.2% of the 1,235 people polled in the survey named newspapers as their No. 1 source for information, By comparison, 45.5% picked the Net, 34.8% chose TV and 7.5% named books. Radio and magazines shared the pocket change.

Curiously, young people put more trust in the newspapers than their elders. Half of of 18- to 24-year-old respondents said they trusted newspapers, but papers got a trust rating of only 45% in the 25-34 group and a measly 35% from the 35-54 crowd. Those older than 55 either don't matter or couldn't be reached for comment.

In all age groups, Internet use is topping the charts -- with a bullet -- as a leading source of entertainment and information. This study may not entertain newspaper companies, but certainly is informative.

Outsource the newsmakers

Reuters plans to enhance productivity by hiring 1,240 journalists in India, quadrupling the staff from the present 300. This suggests a great way to cut our strained federal, state and municipal budgets.

Since the news gatherers will be offshore, why not outsource newsmaking positions, too?

Rather than having a costly Cabinet secretary for Homeland Security in Washington, just hire a guy in India to do it. An Indian woman would work cheaper than the governor of California, eliminating the need to maintain the expensive Governor's Mansion that Arnold Schwarzenegger has shunned in favor of a luxury hotel suite. Ditto, mayors, police chiefs and school administrators.

Write your congressperson soon, before he or she is "right-sized" out of a job.

Why buy the cow when the milk is free?

When radio was invented way back when (well before my time, I hasten to add), the first response of most newspaper publishers was to ignore the subject in their pages, hoping it would go away. When publishers realized radio was here to stay, they ran out and started radio stations, eventually doing quite well, thank you very much.

When TV arrived, newspapers at first refused to print program listings, hoping vainly once again that this nuisance would go away. When publishers realized that wasn't going to happen, they ran out and started TV stations, doing even better than they did with radio, thank you very, very much.

Fast forward half a century to the Internet era. When the arrival of the Internet could no longer be denied, publishers (with the notable exception of the Wall Street Journal) responded to the new medium by endowing New Media Divisions with absolute fortunes so they could put online -- for free, for heaven's sake -- the entire contents of their newspapers. This saved bathrobe-clad readers the trouble of groping under their dew-drenched yews for a sodden copy of the Daily World Journal Chronicle Herald Times News Tribune.

But, apart from cutting down complaints to the circulation department, this actually was not good for business. This accelerated the decline of newspaper circulation, which already was shrinking for any number of well documented sociological, demographic, cultural and competitive reasons. That is to say, kids, instead of reading the newspaper, would rather watch TV, chat on IM, text message via cell, listen to their iPODs or make their own movies. The newspaper habit is dying off even faster than the bifocal-dependent devotees who still read them. Even geezers are finding it faster and more satisfying to visit newspaper websites than wrestling a broadsheet -- or a broad, for that matter -- into submission.

Declining circulation is not trivial, because circulation, contrary to what editors will tell you about the quality of their work, is the only thing a newspaper has to sell. Like any media company, a newspaper has to draw a crowd it can sell for money. If it gives away its costly and valuable product for free on the Internet, a newspaper may win friends and influence people in cyberspace, but it won't gladden the advertisers who pay the freight back here on Mother Earth. If circulation declined too much, a newspaper might even be tempted to fudge its numbers. Come to think if it, that's just what happened at my alma mater, the Chicago Sun-Times, and such other trusty titles as Newsday and the Dallas Morning News.

Not only must newspapers contend with an absolute drop in circulation, but they also face shrinking market share, as advertisers migrate to the targeted and interactive media -- search-engine ads, cable, Internet, podcasts, SMS messaging, blogs, etc. -- that deliver the right buyer to the right place at the right time.

As the media audience fragments and the number of eyeballs declines, advertisers will have diminishing regard for such traditional mass media as newspapers and network TV. Not only will they demand lower CPMs, but they will spend fewer absolute dollars on these media.

Big retailers like Wal-Mart already have no use for newspapers. This is not an isolated data point but a rapidly advancing structural trend, which will accelerate as Wal-Mart's aggressive merchandising wipes out the Mom-and-Pop stores that clasically do -- err, did -- advertise in newspapers.

Although the gentlefolk who run most newspapers have been heading down the wrong path for a decade by pretending they are living in the 1950s, there still is time (albeit a steadily diminishing amount of it) for them to leverage their brands, newsgathering organizations and powerful local market relationships to create new media products that combine their core stengths with the exciting potential of everything from paid online content to email newsletters to blogs to cell phones to iPODS to PDAs to digital photography and home-brewed audio and video. Here's a radical idea: Why not partner with some of the online guys who are eating your lunch?

Normally, those who do not learn the lessons of history are condemned to repeat them. In this case, newspapers won't get the chance. History simply will obliterate them.

'Always On' - or a little off?

You have to admire Tony Perkins, who, as the creator the daring Red Herring, will go down in geek-journo history as the Boswell of the Bubble. Now, he's aiming to reprise the feat with Always On, a magazine of the blogger, by the blogger and for the blogger. More on that in a moment. But first...

I always smile when I remember how the Herring wanted to feature the three founders of such-and-such a promising company on the cover, tarted out in expensive suits and puffing brobdignabian cigars. These guys, studiously scruffy pre-IPO software engineers who spent all their disposable income on Boxsters and lattes, didn't need no stinking suits, and, accordingly, didn't own any. So, the Herring rented them Brionis and, of course, threw in the cigars. If memory serves, that was the high point of that particular venture. Not sure what happened to the Boxsters.

One more reminiscence, then on to the point: When I went to the Herring's aerie atop the old Hamm's brewing plant to pitch whatever company I headed at the time. Tony and crew weren't particularly interested in my yarn but were fascinated to learn I used to be one of the top editors of the S.F. Chronicle. It turns out that Tony and the editors were in the midst of a hot dispute over the headline for the cover of the upcoming issue and deadline was fast approaching. It had to do with whether the stock market was heading up or down. Was it, they wondered, the "Pause That Refreshes" or "The Calm Before the Storm"? I offered J.P. Morgan's: "The Market Will Tend to Fluctuate." If memory serves, they went with something like Ike's delectable "Future Lies Ahead."

As to the planned Always On mag, it is understandably tempting to want to extend a successful publishing model to a new topic. If people like model-train magazines, then it stands to reason that they (or enthusiasts similar to them) will buy knitting, snow-boarding or woodworking magazines, too.

But blogs are different. As the first media form native to the Internet, they have an immediacy, individuality and interactivity that will be hard to freeze-frame for casual bathroom reading three or four months hence. Even if Tony eschews rerunning blogdom's greatest hits and sticks to covering this as an emerging business vertical a la the rise of Silicon Valley, the pickings in the foreseeable future will be slim.

Blogging by its nature is dispersed, entrepreneurial and almost always a solitary pursuit. Who are you going to write about? Who are the Steve Jobs (Jobses?) and John Doerrs of blogdom? And who, for heaven's sake, is going to pay you to advertise? The mega mad-money marketing budgets of the 1990s have long since dematerialized, arguably evermore. Save for Mark Cuban, the multigazillionaire BlogMaverick, few of us can afford a press agent, much less a display ad. With some bloggers, you wonder if they even can scrape together the $49 to buy a subscription.

Notwithstanding, we are rooting for Herr Herring. We hope he proves us wrong.

Monday, December 13, 2004

Making lemonade out of lemmings

My old friend Steve Yahn, a scrappy journalist who has helmed such publications as Ad Age and Editor & Publisher Magazine, once referred to our bosses at the late Chicago Daily News as "rabbits." I could tell by his tone that he didn't mean it as a compliment.

"What do you mean?" I asked, as battered Smith-Coronas clacked loudly through the smoky newsroom and a Rube Goldberg-style conveyor belt whirred over our heads, carrying wads of hastily edited copy to the clattering composing room.

"They've got no guts," Steve huffed, swigging a cold gulp of see-through, vending machine coffee. "They just run like rabbits to their holes."

Not long after that, the newspaper was shut down and about 300 colleagues and I were encouraged to explore new career opportunities.

In fairness to the rabbits, there wasn't much they could have done to save our distinguished evening newspaper from declining circulation; rising production and delivery costs, and perhaps the greatest culprit of all -- prime-time TV.

Newspapers in 1978 were produced pretty much the same way they were made in 1878, 1778 and, heck, 1478.

No one debated the nuances of the "business model." It was older than Benjamin Franklin himself. There were only two choices: sell more ads or cut costs. The most radical variation on those themes was doing both at the same time.

But that was then and this is now.

Today, as you might have heard, we have the Internet and cell phones and iPODs and wireless PDAs and what-all. Each of these technologies offers unprecedented opportunities to give and get information. And each suggests a rich variety of new revenue and profit streams.

Yet, the proprietors of the press are oblivious, walking arm and arm with Poor Richard to Armageddon.

You couldn't blame the rabbits in 1978. They were simple creatures, obeying their instincts, doing the best they could with the information and resources available to them.

But the guys who run today's newspapers have no such excuse. When are these lemmings going to learn how to make lemonade?

Two blind mice meet Dan Gillmor

Caught a talking-heads radio show here in San Francisco earlier tonight in which two distinguished editors and columnist/author Dan Gillmor discussed the future of newspapers.

Predictably, the editors, who hold top positions at two of the Bay Area's biggest dailies, stated that readers in the future always would want to read newspapers written and edited by highly trained professionals like, well, them.

They manfully acknowledged that the Internet, cable TV and other forms of electronic static are fragmenting the audience and distracting their advertisers. But they were sure the institution itself would be safe, because people value so dearly what they, in their professional wisdom, have to say.

On the other hand, Dan Gillmor, who is leaving the San Jose Mercury after a distinguised career as perhaps its leading technology columnist, said he is not so sure tradtional newspapers can survive the combined assault of the electronic media are on their readership and advertising bases. (More on Dan's plans at

The rape of print classified advertising by Craig's List, eBay and the like is well documented. Suffice to say, newspapers would have a chance to survive if they continued to draw a demographically desirable crowd for advertisers. (This, of course, would require embracing certain modern technology and business strategies, as discussed elsewhere herein.)

But the scary part for newspapers (and those of us who love them) is that readers don't really hold journalists in such high esteem as they hold themselves. In a recent Gallup poll, journalists ranked only a notch or two higher than the least-beloved profession, used-car salesmen. Adding insult to injury, TV reporters were rated as more trustworthy than the print crowd.

As for Dan, he is off to pioneer participatory journalism, where mere civilians can sign up to lend their skills to comforting the afflicted and afflicting the comfortable. We're all for it, so long as it is an all-volunteer force and there is no draft.