Evan Rudowski: Web Transplant

Newsday’s Decision to Charge for Content is Desperate and Stupid

I began my career at Newsday in 1986 when I was hired at the age of 23 to work on some of their very first online services. I spent seven years working on online services there and got to know some fantastic people. My final presentation, before leaving in 1995, was an introduction to this new thing called HTML and linking. I haven’t been at Newsday for a while now, and its changed owners and management a few times, but somehow I still care about the place.

My company, SubHub, enables people to build subscription websites quickly and easily. So you’d think I’d be applauding Newsday’s move to such a model. But I’m not. It’s going to fail.

Charging for content works when the content is unique, actionable, highly targeted and from a trusted source. Newsday ticks perhaps two of the boxes – it’s a trusted source, and maybe some of the content is actionable (restaurant reviews, business news, etc.).

Charging does not work for commodity content, and that’s mostly what Newsday has. National and international news is readily available elsewhere. Sports coverage, syndicated features – all available elsewhere. Movie reviews, music reviews – virtually everywhere.

Newsday’s knowledge of its local market is more unique and valuable, but even that too is available in general news coverage from numerous online and offline competitors.

In short, Newsday has little to charge for. This doesn’t mean it couldn’t create some online content that meets the criteria for charging successfully. The Wall Street Journal keeps coming up with new online packages it can get audiences to pay for. But I haven’t heard that Newsday plans to do this.

Just putting the existing stuff behind a firewall isn’t going to help. Bundling it with programming from parent Cablevision – well what’s that all about? Is Cablevision going to create new local video content that people would pay for? Or does access to Newsday online just become another throwaway incentive to buy a cable subscription?

Putting Newsday’s existing content behind a firewall is just a way to deprive it of oxygen and kill it. Unfortunately, the kind of creative thinking necessary to create content that people will pay for is not likely to come from a cash-starved newspaper company or its cable operator owners. It’s more likely to come from the smaller players and individual entrepreneurs, like the ones we see at SubHub.

Newspapers are crashing and burning all around us now, and Newsday and its owners have found another way to do it. I wish them well, but I’m glad I’m not on the online team there anymore.

Why Facebook Will Eventually Go Premium

There's more bad news for Facebook as it seeks to justify its huge valuation -- the world's largest advertiser is not finding Facebook to be fertile ground, according to Randall Stross in The New York Times.

The most successful effort that Procter & Gamble was willing to point to on Facebook was a 2006 page for Crest Whitestrips, which attracted 14,000 fans at its peak -- many apparently lured by free giveaways such as concert tickets. Out of Facebook's 130 million users that's not a rousing success.

That the Crest Whitestrips experiment left a funny taste in P&G's mouth was reinforced by the comments of a senior P&G marketing executive, who said, "I really don't want to buy any more banner ads in Facebook."

(The article also brought me a bit of deja vu when it described P&G's "America's Favorite Stains" campaign for Tide detergent on Facebook. This took me back to a meeting I participated in with P&G for Excite about 12 years ago, when they eagerly described their desire to have an online stain finder application on Excite -- an idea that as a product guardian made me feel a bit dirty. Apparently P&G persists in its noble quest to bring stain information to the world online. I felt vindicated to learn the Facebook version had attracted only 18 comments.)

There is further evidence of problems at Facebook when we consider the news that Facebook CFO Gideon Yu was in Dubai in October seeking to raise additional funding. Why Dubai? Because U.S. investors weren't interested at the proposed valuation, the reports said. And seemingly Dubai investors weren't either, as we've yet to learn of any recent new investment.

There was more bad news last week when it was reported that Facebook cancelled plans to allow employees to sell some of their shares at a $4 billion valuation. Why? Because potential purchasers were balking at the valuation.

It's not difficult to understand why this is happening. Facebook is the latest to apply the classic Silicon Valley model which says build a big audience first, and then figure out how to monetize it. Investors, meanwhile, pile on in hopes of enjoying a big payout once monetization happens.

But, oops, monetization looks like it's going to be very difficult on social networks such as Facebook. At least, it will be if it's dependent on advertising. Investors are looking for some evidence that Facebook is succeeding in leveraging its vast audience to generate advertising revenues, and so far the evidence is scant.

The many of us who use Facebook addictively can certainly attest to its value in our lives. However we can also probably attest to just how irrelevant advertising is to us on Facebook. That's Facebook's problem, and it's a huge one.

The solution? Start charging a premium for access to certain Facebook features. The basic Facebook membership would continue to be free, but enhancements would be extra. This might include photo and video storage beyond a certain limit, or sharing of certain data, or friends beyond a certain amount. I'm just guessing at the ideas. But given how essential Facebook has become for so many of us, it's easy to envision many users paying a monthly or annual fee for an enhanced membership.

At 130 million members, if 10 percent paid $5 per month for enhanced memberships, Facebook would be clearing $65 million per month or $780 million per year. There are other revenue streams to develop too.

That's not enough to justify an overly inflated valuation, but it's a pretty good start. And it's likely a lot better than they're going to do helping P&G teach young people about stains.

So watch this space. Subscription is increasingly the future, and Facebook will eventually join the bandwagon.

Worlds Have Collided

My old industry friend Len Muscarella has a bit of a grumble in his latest Interactive Media Associates newsletter about the increasing use of Facebook for networking by business colleagues.

Len was one of the pioneers of online media, having been one of the early executives at Prodigy, which in the early 1990s was one of the first and most cutting edge consumer online services. I worked with Len at Newsday when we brought him in to help us launch our own service on the Prodigy network. Len has seen more trends in his career then most of us ever will.

 

I understand where Len is coming from, but I think the cat is out of the bag on this one. The days are over when we could compartmentalize our business and personal lives, as if they were separate personae.

(I can't help but recall the Seinfeld episode in which George Costanza's fiancé meets his friends for the first time. "Worlds have collided!!" he shrieks.)

In today's world it's all out there, if we choose to use these services. And if we don't, we're left behind. So we've got to put it out there.

That's why I know that last night a leading venture capitalist went to a particular concert, or that a prospective employee recently had a new baby.

For some people this might be too much, and it does take some getting used to at first. But actually, it's not so bad to know you're doing business with a real person, with their highs and lows, joys and heartaches -- rather than an empty suit.

Now this doesn't mean that we must lose control of our public image. If you post photos on Facebook of yourself incomprehensibly drunk, or leering at members of the opposite sex -- well then you're stupid. Or maybe that's you. And maybe people will not want to do business with that person.

But if you want people to know who you really are, and what excites and inspires you, or where you come from, then Facebook is a great place to do it. You might find some common ground that you didn't know existed. You'll be human. And after all, we're all humans doing business with other humans.

Oodle Gets Facebook Classifieds

Oodle announced today that it will take over the running of Facebook Classifieds, adding to its roster of deals which includes MySpace as well.

This is a great move for Oodle, founded by some of my ex-Excite colleagues including CEO Craig Donato.

It's also an acknowledgement by Facebook that it cannot do everything and expect to do it well. Rather than run its own classifieds service, it outsources to a specialist. What they give up in revenue sharing they should make up in increased activity.

This is especially true for classifieds which depends for success on having a critical mass of listings. A neutral player, aggregating listings across multiple networks, will have a more robust database than individual networks would have if they took the silo approach and built it themselves.

But even in general it always seems to take forever for the big network players to come around to realize they'd often be better off outsourcing than owning. Again and again their impulse is to own and control it all.

So suddenly you have telco executives who fancy themselves to be content programmers or advertising salespeople. Or you have social networking sites who think they can do classifieds. Or mobile operators who think they can run a "walled garden" portal that will somehow satisfy their surfers.

We already own the customer relationship, the logic goes. We already own the billing relationship. So let's extend it by giving them great programming. And why share revenues -- let's just do it ourselves.

Often years and millions of dollars later, they finally realize that outsourcing to specialists is not a bad idea. Of course, at many of these companies there is no collective memory to learn from as executives get moved from one position to the next, never able to apply learnings. So someone else comes along and makes the same mistakes again.

At least Facebook has a bit of Silicon Valley culture, which typically means a willingness and ability to learn lessons more readily and adapt more quickly. Probably this has not been a costly lesson for them to learn. The Oodle deal now provides some upside opportunity.

The challenge now for Oodle is to generate enough activity to make its classifieds database broad and robust enough in an increasingly fragmented classifieds marketplace. But certainly, landing some of the prime beachfront real estate, on Facebook and MySpace, is going to help.

Who Decides What You View?

In today's New York Times Magazine, Jeffrey Rosen asks who decides what content we can view over the Internet.

Increasingly it's Google, with its vast and global search engine reach as well as its dominance of online video via YouTube.

Somewhat disconcertingly, we learn that the first line of arbitration at YouTube is a corps of twenty-somethings who rule on individual requests to find certain videos unacceptable. If it gets too tricky for them, they bump it upstairs to Google headquarters where a cadre of lapsed journalists-cum-attorneys try to strike a thoughtful balance between local law and free speech.

Not so easy when the laws vary so much from country to country and when the volume of content is increasing nearly exponentially. Even the Google-istas admit their current model is unsustainable.

And what happens if Google and other companies choose in the future to weight their decisions more in favor of commercial considerations than free speech objectives?

Worth reading.

A Big Warning Sign for Apple

When I wrote last November about my experience with my cracked MacBook, I already knew I wasn't alone. A simple web search found dozens of defective MacBooks with the identical defect to mine, and the photos to prove it. It was clear, MacBooks were cracking like crazy.

After my blog post, I had the shell of my MacBook replaced at the Apple Store in London, only to see it crack again, in exactly the same places, less than a month later. So back again I went to the Apple Store, to have all the parts replaced a second time.

What a disappointment. The MacBook I had dreamed for so long about getting turned out to be a rotten Apple. It works fine (and always has) as long as I don't mind the chassis peeling away like bark from a tree. I now have the thing armor-plated, with a hard plastic shell snapped onto it, a keyboard cover, and padding over the wrist rests. When I close the lid I first lay down a delicate little chamois cloth to cushion it. I do all but give my MacBook a kiss as I open and close it, in hopes it will not fall apart.

My plaintive cry of grief in my November blog post attracted some serious traffic, especially for my modest blog. But I was wondering when an uber-blogger might take up the cry. And now someone has. Michael Arrington, of TechCrunch, asks the same question -- why are so many Apple products falling to pieces?

Judging from the more than 200 responses to Mike's post, a lot of people are wondering the same thing. Apple, are you listening? Your stellar reputation for making wonderful things is at risk. A groundswell is building.

This reminds me of the Dell episode several years ago, in which influential blogger Jeff Jarvis rounded on the hapless company, and the floodgates opened. The vitriol unleashed against Dell was hugely damaging. They eventually recovered, by listening better.

Is Apple the next Dell? Apple has so much goodwill amongst its supporters (myself included, in spite of my experience), that I think they can recover. But their reputation is so good, they have much further to fall.

The first step in curing a problem is admitting you have one. So, Apple, own up to the quality issues. Admit it, apologize for it, and fix it. We'll all be on your side if you do. If not, what a momentum-killer.

Congratulations -- It's a Tweet!

Recently I received a message via FriendFeed, broadcast by a friendly associate, someone who is highly successful, liked and respected -- and deservedly so. To paraphrase, it said that he was in the delivery room, using a wireless connection, and the baby was on its way.

What a funny world we live in. I hadn’t known he was an expectant parent (we’re not that close, and we’re separated by thousands of miles). Now I know. And I’m happy for him.

Of course, in my daily information flow, or lifestream if you prefer, my friend’s headline carried just as much weight as news of the latest presidential poll rankings; the impeding Beijing Olympics; invoices I needed to pay at work; and the 15:43 train I needed to be sure to catch. They all flowed equally across my screen, carried by one of the many tools I have installed for sending chunks of information this way and that. These tools do not discriminate; they do not care what it is they’re sending. Making sense of it is up to me.

Arguably the birth of a baby is most important of all of these bits of information. But in the old days, given the extent of my acquaintance with this person, I might have learned of the blessed event closer to the child’s first birthday. Which is just about where it should be in my list of personal priorities (with no offense intended to my distant friend).

But we all live in public now, to paraphrase another friendly old acquaintance, Josh Harris, who realized this earlier than most of us. And this made me wonder what my friend’s partner, who was presumably in the delivery room groaning while he was tweeting, would have made of this.

I asked my one-person focus group, my wife, who in her deprived existence does not tweet, or twhirl, or jabber, or tumble or twitter (in the old days people were institutionalized for doing such things, especially all at once). She assumed that my acquaintance must have been joking. She made it very clear that should we ever find ourselves in the delivery room again (however unlikely), I’d best not be sending messages out until her work was done.

For all I know, my friend’s spouse may be an executive at one of these services. But my wife is not. Therefore, here are some tweets you will surely never receive from me:

 “Wife is ovulating – wish me luck dudes”

“Never mind – she wants to finish that New Yorker article first”

“Still in the delivery room – everybody tweet her to push!”

“Wow - the afterbirth is nearly as big as the baby -- see photos on Flickr"

Way Cuil?

The new search engine Cuil launched yesterday and Richard McManus of ReadWriteWeb wonders how Cuil managed to get so much publicity so quickly.

I tried Cuil (by searching for myself of course) and found that while it was visually pleasing, the results were not as accurate as I would have wanted -- some older items were ranked higher than newer ones, and their association of images with results summaries was somewhat off -- for example there is a thumbnail of a very attractive redheaded woman next to the summary of one of my blog posts, and one of Winston Churchill next to another.

Now I like redheaded women, and I like Winston Churchill, but as far as I am aware neither have been referred to in my blog. So unless Cuil knows me better than I know myself, they have some tweaking to do. To be fair, it's still early days for Cuil and they surely will improve.

The reason Cuil has been met with so much anticipation, and so much hype, should be worrying to Google. What it suggests is not that Cuil is so cool but rather that people are starting to look for what's next. The days of Google as the rising underdog are over. They're the establishment now. Since everybody loves an underdog, we're all looking for the next one.

The isn't to say that Google is losing its relevance, or its edge -- but maybe a bit of its place in our hearts.

Ed Bott Misses the Mark

Ed Bott blogged last week about a pay site for programmers that frequently shows up in Google search results and irritates him and others because they find themselves at a pay wall when they click through to results. His somewhat heavy-handed solution? To ask Google to remove all pay sites from its index.

Of course there are many subscription websites that provide very useful knowledge and expertise to their communities. There are many sites worth paying for because they provide unique, actionable and valuable information, frequently updated, from trusted sources. We know because at SubHub we provide the publishing platform for many of these sites and we see the communities that have grown around them.

There is no reason why these sites should not be findable via Google for those who would find them relevant. If Google were to remove them from its index then Google itself would be providing an incomplete picture of available information sources, and would be failing at its mission of indexing all of the world’s information — not just all of the world’s free information.

What is interesting is that despite the complaints Botts' commenters seem to have about the specific site in question, many of the comments then go on to explain how to game the system using caching or blocking of cookies in order to get the information from the site for free. So it’s not that the information is not valuable, it’s that some people don’t want to pay for it.

I will leave it to others to comment on the ethics of doing this, but it strikes me as a bit dubious. If you don’t believe in paying for the information, fine, but don’t steal it. Many of Botts' readers seem to be programmers who presumably would object if someone swiped their intellectual property — their code — so why would they be comfortable swiping someone else’s intellectual property — their content?

What they seem to be saying is that they agree the content on the pay site is indeed valuable to them professionally, but they are too cheap to pay for it. Which does not lead to the conclusion that Google should remove such sites from its index, but rather that pay sites use solutions that do not make it quite so easy to get at the paid content.

A Friend in Need is Friended Indeed

I had worked with Joe years ago and always assumed he generally liked me, so you can imagine how I felt when I sent him my friend request, only to receive no response.

I could see his friends list, and on it were other mutual friends. He had friended them, so why not me?

Perhaps he didn’t really like me as much as I had assumed. Might this be his way of telling me? Well then, maybe I didn’t like him so much either, I reckoned.

But what if he wasn’t well? Surely if he were well, he would have friended me. Maybe there was a death in his family. Or perhaps he was just busy?

I couldn’t know. At least he could have updated his status message.

I was left feeling confused, and maybe a little bit slighted. Joe was very popular, and if he didn’t want to friend me, maybe I wasn’t worthy. But who was he to judge me?

I wondered if I should reach out to Joe. I sent him a message, but he didn’t reply.

My friend AW had a similarly perplexing online networking experience. At an alumni reunion for the blue-chip consulting firm where she once had worked, an ex-colleague confronted her.

“What’s the deal with you on LinkedIn?” he challenged her. “Why are you hiding your contact list? Doesn’t that defeat the purpose?”

AW was perplexed. Was she obligated to open her contact list to anyone who might like to troll it looking for leads? Wasn’t it reasonable for her to keep her contact list private? This bloke didn’t think so. In his mind, AW wasn’t playing by the business-networking rulebook, and he was offended.

I’ve apparently offended people too. I was once approached by a business acquaintance who requested that I write a personal recommendation that could be added to his LinkedIn profile.

The problem was that I had never worked with the guy. I think we had met a few times when I was at Excite Europe. On this basis, he wanted my personal recommendation.

If meeting me is all it takes to get my personal recommendation, that’s a pretty low standard. I told him why I was uncomfortable with his request, but he wouldn’t take no for an answer. He actually tried to convince me that we had indeed worked together – although the best he could manage was to throw around the name of some mutual acquaintance.

We went back and forth on this for several days, as though his persistence would be enough to force me to admit to some sort of repressed memory of our having worked together. It was a bit like the satanic child-molestation cases of the 1980s, when entire communities became convinced, in spite of the lack of evidence, that nursery school teachers were ritually abusing their children.

This guy was the Mrs. David Letterman of business networking, always lurking around every corner. I was connected to everyone in the world through him. He was a social networking whore. Being linked through him was useless, since everyone else was too. With him, it was quantity, not quality. Every new contact was another notch in his belt.

After our bizarre debate over whether or not we actually had worked together, I finally got disgusted enough to drop my would-be colleague from my contact list – the only time I’ve ever done that. Checking his profile, he already had hundreds of personal recommendations anyway – so either my memory is really faulty or lots of other people are as indiscriminate as him. With hundreds of recommendations already, why did he work so hard to wring one more out of me?

Not long ago I saw this same person quoted in the newspaper, boasting about how he actually had hired people to manage his online networking presence – apparently too vast to handle by himself. Which leads me to wonder – had I even been arguing with him at all, or just with one of his paid impersonators? I guess I’ll never know.

Back to Joe. About a week ago, he finally friended me, along with about 150 other people. “Sorry,” he said meekly. “I had so many friend requests I was overwhelmed, so I just sat on them.”

Joe had suffered from social networking paralysis. But all that mattered to me was that he had clicked a link and thus validated me as his friend.

It’s true that in the old days it was never necessary to validate friends electronically. But I didn’t care. I felt like Sally Field clutching her Oscar: “He likes me,” I told myself. “He really, really likes me.”