Content Matters

Powerset Launches; Most Ambitious Semantic Search to Date

The long-hyped awaited semantic search engine Powerset has finally launched. To start, Powerset is running its search engine against Wikipedia and including reference data from Freebase.

Powerset uses semantic analysis in a few ways:
There is a natural language query box, so it can interpret questions like "Which companies has Microsoft acquired?", matching entities and facts from your search request to those in the Wikipedia data.

In displaying results, it first attempts to disambiguate multiple references to your search and arranges the content accordingly. Next, it applies fact extraction, identifying relationships between entities and displaying what it calls Factz.

In this example, we see how Powerset handles the "disambiguation 101" example of the word Java, starting with the island, the programming language, a band, and more. Next, it shows Factz about Java - relationships for programmed, used and supported.

The Factz seem a bit simple - it appears they're simply extracting noun-verb pairs. So, while the initial factz for Java make sense (such as programmed-language), as you dig deeper you find examples like "jarred confdesigner", whatever that may mean. The fact was apparently extracted from the sentence: ConfDesigner can be started directly via "java -jar confdesigner.jar" (because of added jar-Manifest).

I show this example not to disparage Powerset, but rather to point out how difficult it is to do semantic analysis on a massive corpus of text like Wikipedia. With a homogenous data set, for example, business news or bioinformatics data, you can tune a semantic engine for maximum precision and recall. With such a general data set, it's incredibly hard to consistently generate strong results.

The Powerset user interface is very clean. For any Wikipedia page, they add an "Article Outline" floating toolbar. This Ajax-based toolbar can either display the standard outline of the page (simply parsing the wikipedia tags around heading sections) or you can click on "Show Factz" and it will display the facts that it uncovers within each section as shown here. I think this adds a lot of value to Wikipedia.

Overall, I'd expect that I will use Powerset to search Wikipedia going forward, rather than going to the underlying site. While other power users may do so, the bulk of the wikipedia traffic comes from Google and I expect that to continue in the future.

I don't think the team at Powerset expects to make their money as a better search tool for Wikipedia in the long run. Rather, it's a proof-of-concept to demonstrate the capabilities of semantic search. Powerset has delivered a very compelling site search engine. While others may try to compare Powerset to Google, that's not a realistic comparison. Barney Pell and company have set their ambitions on replacing Google, but in the long run, I think they'll find their niche will be in semantic search for the enterprise, a web site or a specific domain.

I've been pretty close to the semantic search and text mining space since my early days at ClearForest in 2000, and while the promise of semantic analysis has always been great, the actual deliverables have consistently come up short.

Powerset seems to be making a credible claim to be the first legitimate semantic search engine of any scale.

Powerset has been 2+ years in the making, which seems a lifetime in the persistent beta world of Web 2.0, but they've built on 15+ years of computational linguistics and seem to have a viable offering. It will be interesting to see where they take it next.

For more on Powerset, read John Blossom, TechCrunch and ReadWriteWeb.

MarketingSherpa Names Paul Allen Online Subscriptions Entrepreneur of the Year

No, not that Paul Allen.

Paul Allen, Founder and CEO of Familylink.com.

Allen is the former founder of Ancestry.com and in 2006 launched a new genealogy subscription site called World Vital Records. They recently released a Facebook app - We're Related - (soon to be launched on Bebo, Orkut and others). They are getting 2.5 million page views per month, the bulk of which are coming from the Facebook app.

So, congratulations to (the other) Paul Allen.

Google Friend Connect

Google tonight will launch Google Friend Connect, the first major product introduction around the Open Social platform.  Friend Connect will allow websites to integrate social networking capabilities without the need to write code.

The announcement comes on the heels of announcements from MySpace and Facebook that they are enabling more data portability. In other words, visitors to a given website should be able to leverage the relationship data they have stored at any other social networking site.

Data portability will be critical to the future growth of social networks. Anyone who tries to figure out which friends they have on LinkedIn vs. Facebook vs. Plaxo vs. MySpace knows the value of this. And, for Google and its partners, whoever gets out in front on that wave has the chance to be the primary host for that data. It seems that Google has taken a slightly closed approach to openness - rather than a fully open service, they provide code to enable you to open a Google Open Social iFrame.

Will try to post more tonight after the site goes live, but there's lots of good coverage already from  Forrester's Charlene Li, TechCrunch, Dan Farber at CNET, Read/Write/Web and Mashable, among others.

The URL (not yet working) for Friend Connect will be live tonight.

MarketingSherpa SoS

I'm posting from MarketingSherpa's Selling Online Subscriptions conference today. 
Two interesting sessions this morning:
MarketingSherpa research director Stefan Tornquist on "Paid Content research: stats on what works" and Flint McGlaughlin, Director of MarketingSherpa parent MarketingExperiments providing case studies of landing page optimization.

I'm waiting for them to post those presentations to the attendee site, but in the meantime, here are a few highlights:

Stefan Tornquist - Key takeaways from their latest survey of online publishing marketers:
What's working for b2b publishers? - No real surprises on this one - SEO, Paid Search marketing, online advertising (banners & sponsorships), viral marketing.

Web 2.0 - looking at b2b publisher respondents as compared to a year ago:
- 55% offer RSS feeds (up 2% over prior year)
- 50% offer blogs (up 8%)
- 35% are providing video clips (up 13%)
- 25% are podcasting (up 5%)
- 16% offering wireless (up 4%)

Interestingly, when they look at the consumer publishing side, many of the key indicators are flat.
- 45% offer RSS (flat to last year)
- 44% offer blogs (flat)
- 41% offer video (flat)

The video number for consumer publishing caught me by surprise. While the raw percent of sites offering video was higher (at 41%) than for b2b publishers, I'm surprised to see that there was no year-over-year growth in that number for the b2c publishers, especially with all the expected growth in that market. I wonder if that's due to sites being afraid to embrace video, a lack of enough relevant content or something else. Sounds like an opportunity.

More to come later...

MarketingSherpa Selling Online Subscriptions

Monday and Tuesday I will be at the MarketingSherpa Selling Online Subscriptions (SoS) conference at the Museum of Jewish Heritage in downtown NYC. They've got a solid lineup of presenters including speakers from Hoovers, Zagat, TheLadders.com, ShareFile, Phanfare and more.  The MarketingSherpa events are case study-based and provide lots of practical knowledge from content companies.

In addition to the case studies, there's also a lot of coverage of SEO issues and the obligatory Web 2.0 strategies session.

If you plan to be there, drop me a tweet @graubart or grab me at the cocktail reception. For those who can't make it, access permitting I will blog the sessions and post relevant tweets.

Hope to see you there.

Why Aren't More Blogs M&A Candidates?

Felix Salmon has been the leader in following blog valuations in his periodic Blogonomics posts on the Portfolio.com Market Movers blog. Meanwhile, Doug McIntyre has ranked the 25 most valuable blogs on his 24/7 Wall Street blog.

Now, the mainstream media has taken notice (at least from an editorial perspective). The June issue of Mergers & Acquisitions Journal will have an article on why blogs haven't been actively pursued as M&A targets by the major media companies (with a few exceptions like Jason Calacanis' Weblogs Inc. acquired by AOL). A preview of the article appears on their Mergers Unleashed web site (with a few quotes from me included).

Felix Salmon wasn't sourced in the article, which is a shame, because he has been out in front on this issue, notably in his scathing response to a Breakingviews article earlier this spring.

Which blog do I think has the best chance to be acquired by a big media brand? I'd vote for HuffingtonPost, though they should sell before the election, as I think they'll be worth less in January than in November.

Stop the Presses. The Newspaper Industry is Broken

Via PaidContent comes word that private equity firm Avista has written down 75% of its original investment in the Minneapolis Star-Tribune. The firm acquired the Star-Tribune in late 2006 for $530 million.

In a letter to shareholders, Avista states "In the past year, the newspaper industry has suffered greater than expected declines in circulation and advertising revenue, particularly in print classified advertising."

Greater than expected? Expected by whom? There were a lot of people (including this blog) who have made strong arguments for some time now that the newspaper industry is dead.

During the past 18 months there have been a number of newspaper acquisitions, many by supposedly smart people. Private equity firms boldly entered the market, thinking they could work the same magic they'd worked in manufacturing companies. But turning around a broken company is one thing; turning around a broken industry and a broken business model is something else altogether.

The excuse du jour is that the newspapers didn't anticipate the impact that Craigslist would have on their classified advertising. Again, that "anticipation" problem could have been easily solved had they read this blog, Ken Doctor, John Blossom or any of a dozen others. Or, perhaps attended any of the many conferences like Information Industry Summit, BSeC or PaidContent events where this has been flogged (like a dead horse) for the past few years.

But speaking to executives at the Argyle Forum (via Silicon Alley Investor), former Time and WsJ editor Norm Pearlstine says that much of the problem is the lack of innovation by newspapers during the 1980's when they had huge margins.

The last game-changing innovation by a major newspaper chain was the launch of USA Today, in 1980.

Pearlstine suggests that we are headed back to a highly fragmented news market, like we had at the end of the 19th century when each city had dozens of small newspapers. He feels that newspapers cannot afford to support the type of investigative journalism that we've had in recent years.

That would be a big loss as investigative reporting is needed to balance the powers of government and business. I hope that some major newspapers can maintain that level of reporting (perhaps funded by benefactors not looking for profits) but it's pretty clear that there will be a lot fewer that will offer substantive reporting in the future.

UPDATE: It turns out that there's one more critical news source who is ahead of the private equity firms in figuring out that the newspaper industry is broken. Here's a new article from a great source of investigative reporting themselves - The Onion: Dying Newspaper Trend Buys Nation's Newspapers Three More Weeks. Killer pseudo-quote:

It's nice to see that the printed word is still, at least for now, the most powerful medium for reporting on the death of the printed word.

Twitter Must Fix Scale Problems

I've been following the commentary on the election results on Twitter tonight, trading messages with Larry Schwartz, Dave Winer and others.

Around 10:20pm EST, Twitter went down for a good 15 minutes or so. They've had a bunch of such outages recently and just let go their head of ops. I'd post this as a tweet, but, umm.. Twitter's down.

Twitter's really getting good mindshare (at least among the digerati) but they could lose it all in a hurry if they don't fix the scaling issues. I hope they get it done because I really like the app, but Friendfeed or someone like Google (who just introduced some Twitter-like sharing capabilities in Reader) could take the business away in a heartbeat.

Royal Pingdom has a great chart showing social network downtime since January. As shown here, Twitter tops the list, down twice as long as the runner-up site, Reunion.com. Good news, I guess, for those looking to cheat on a spouse with their highschool sweetheart, but bad news for those of us using Twitter.  See the chart here:

btw - you can follow my tweets here.

A side note - it really looks as though the west coast still has a lot more fun than us on the east coast. The same group who spent last week waiting for Iron Man to be released were all heading out to a Fast Company party tonight while the east coasters were sitting home watching election results.

Ann Michael Joins Really Strategies

Content industry marketer Ann Michael has joined Really Strategies as Vice President and General Manager. In her new role, Ann will head their professional services and be responsible for RSuite implementations and client customization.

Ann is a content industry leader with strong experience in scientific and technical, consumer and b2b markets.  She also authors the Manage to Change blog. Ann will be a great addition to the ReallySI team.

Best of luck with the new role, Ann.

More Rumblings on MicroNoo

Lots of blog posts and tweets on the Microsoft (NASD:MSFT) - Yahoo (NASD:YHOO) breakup this morning.  If the market closed now (1pm EST), my prediction in Fred's poll would have nailed it:

I pegged it at $24, though I think it may initially trade down to the $21-22 range before trading back up to a close of $24-25.

So, while I'm on a hot streak (one in a row), I'll throw a few more predictions out there:

1. Jerry Yang will step down by December as the stock languishes in the $20-22 range
2. Microsoft announces a big acquisition (Salesforce (NASD:CRM)?) by the end of the summer, so Ballmer can repair his reputation.

Here's some of the interesting comments on the blogs and twitter:

Henry Blodget reports that Yahoo claims it didn't realize MSFT had bumped up the offer to $33 until they received Ballmer's letter. His take: First, Microsoft walked away in part because of price and in part because Steve Ballmer lost his enthusiasm for the deal. In our opinion, this makes a future deal less likely (especially over $33). Second, Yahoo misjudged Steve Ballmer's commitment to the transaction and, as a result, blew it.

Rafat Ali notes that big institutional investors would have pushed Yahoo to make the deal if the offer was at $34 per share -- just a dollar more than Microsoft's final offer.

Paul Kedrosky notes "this is a red letter day for VCs, btw. not only aren't two startup acquirers turning into one, MSFT & YHOO are going to be buying like mad."

John Blossom suggests the breakup was good for Yahoo based upon the two companies approach on IP: "While there were some important synergies that would have come out of a Microsoft deal, in general it would have been an acquisition by a company driven by old concepts of intellectual property value of a company that is starting to move far more aggressively into new concepts for realizing the value of intellectual property."

Doug McIntyre suggests as a next step that Microsoft buy Chinese search engine Baidu (NASD:BIDU), noting that Asia is the future growth spot for Internet search and that Baidu's current market cap is $12 billion, a fraction of the $47 billion it offered for Yahoo.

From a shareholder perspective, who's been the biggest winners and losers?
Looking at stock price changes since the deal was announced on Jan 31 and including today's close:

MSFT dropped from $31.91 to $29.08, a loss of nearly 9%
YHOO has gained 29.7%, going from $18.87 to $24.47
GOOG, meanwhile, has gone from $511 to $595, a gain of 16% by executing its plans while watching its supposed competitors implode.