Content Matters

Upcoming Events

Despite the onset of summer (or, perhaps, in light of the non-summer-like northeast weather), there are a number of interesting content industry events coming up.

This Wednesday, the SIIA is hosting a brown bag on mobile delivery platforms. The panel discussion, Google, Kindle, iPhone: How to Leverage Hot Content Delivery Platforms for Profits, will be moderated by Mr. Content Nation, John Blossom and features Alisa Bowen, Head of Consumer Publishing at Thomson Reuters; former WSJ publisher and co-founder of the new Journalism Online, Gordon Crovitz; and Chris Kenneally of Copyright Clearance Center.

It should be a fantastic panel; you can register at the SIIA conference site.

Few areas have felt the impact of technology and social media more than politics, as evident by the most recent US presidential election. The 6th annual Personal Democracy Forum, to be held June 29-30 at Lincoln Center's Rose Hall, will bring together political practitioners, technologists and journalists (traditional and alternative) to explore the impact technology is having on politics and what the potential ramifications will be for society.

The event has a star-studded lineup of speakers including Craig Newmark, US Gov't CIO Vivek Kundra, 538.com's Nate Silver, Ana Marie Cox, Twitter co-founder Jack Dorsey, Frank Rich, Clay Shirky and more.

Our friends at Gotham Media Ventures have arranged for a $100 discount on PdF tickets for Content Matters readers. When registering at the Personal Democracy Forum, use code gothammedia for the discount.

Speaking of Gotham Media, they will be hosting a breakfast panel on the future of media July 8. Entitled "Media in Crisis: Is There a Way Out?", the panel features Andrew Heyward, former President of CBS News, Air America Radio CEO Bennett Zier, Jason Klein, CEO of Newspaper National Network and Eric Dezenhall, founder of Dezenhall Resources, a crisis management firm.

This panel is part of Gotham's Innovation series, which focuses on content and technology. With great panelists, it should be a lively discussion. I hope to see you there.

Professional Blogs Turn to Research for Added Revenue

In recent years, the line between blogger and industry analyst has been continually narrowing. For technology professionals in particular, much of the product and industry analysis that came from IT analyst shops has largely been replaced by blogs. That's not surprising. Many IT analysts now blog and others who have left the big shops like Gartner or Forrester have started independent blogs.

What's interesting is that now, as the online advertising market has dried up, a number of professional bloggers are now turning to paid research as an additional driver of revenues.

Today GigaOM announced the launch of GigaOM Pro, a subscription-based syndicated research site, that will be available at the modest price of $79 per year. GigaOM Pro will focus on a handful of tech sectors - Green IT, Mobile, Infrastructure and Connected Consumer - and will use both internal resources (newly hired Research Director Michael Wolf, formerly of ABI) and freelance analysts.

Last year, ContentNext, publisher of PaidContent, MocoNews and ContentSutra, hired ex-Merrill Lynch analyst Lauren Rich Fine to head up a proprietary research effort. They've released a few detailed reports, most recently a social media report called Following the Money.

Earlier this month, ReadWriteWeb released their first premium report - ReadWriteWeb's Guide to Online Community Management, a combination of case studies, best practices and an online component which aggregates relevant stories on the topic.

And, it's not just technology companies. Financial blogs are exploring the same paths. Footnoted.org recently launched Footnoted Pro, a subscription-only online newsletter which provides actionable research, augmenting the basic information on the free site.

Meanwhile, StockTwits (while not a blog) has announced StockTwits Premium, an a-la-carte offering of research and tools for its active trader community.

Blogs are morphing into traditional b2b media companies, with three revenue streams: advertising, paid research and conferences. And that's going to raise the bar on the traditional analyst research firms to deliver greater value.

Twitter Quitter Issue a Canard

I'm amazed at how much hype I continue to see about the Twitter Quitters - the stat reported by Nielsen that 60% of new Twitter users are no longer using the service after 30 days.

Story after story quotes this figure and talks about how it it portends problems for Twitter.

That's a bunch of nonsense!

The high abandonment rate among new users is largely attributable to two factors:
1. The huge hype that has occurred, where millions of people who are unlikely Twitter users suddenly give it a shot.
2. The non-existent cost barrier to try Twitter as a user

First, let's look at the hype factor. The hype cycle hit its peak in April, when Oprah used Twitter and CNN and Ashton Kutcher had their contest to see who could hit 1 million followers first. These events brought literally millions of new users to the Twitter signup page, many of whom had no idea what they were signing up for. Are you a fan of Ashton Kutcher? Well, click here to help him win the contest. Do you like Oprah? Have you bought the books from her book clubs? Well, now, take a minute to sign up for this thing that she says is pretty cool.

But the demographics of many of those new users did not suggest someone who was likely to become a regular Twitter user. Just think about the people who've probably asked you about Twitter in the past 60 days.

For me, the tipping point was when my mother-in-law, a 75-year-old woman who's never used a computer (nor flown on an airplane, but that's a different story) asked about it. If she had a computer, she might have been willing to try Twitter, but there's no way she'd give it more than about three minutes.

Second is the ease in trying Twitter. It's free and doesn't require the user to download or install anything. Basically, if you're willing to register, you're now  a user.

Taken together, you have a huge audience of people who probably did not understand Twitter, but were willing to invest two minutes to register because it seemed momentarily of interest.

Now take a look at what we know about Twitter. First, the network effect is critical. Until you follow at least a few dozen people, there's not much to read, and until you have a similar number following you, conversations don't occur. So, if you signed up to follow Oprah, you might see one or two tweets per day. Not a very exciting user experience. Twitter only works when you follow a community of like-minded people. That happens when you are introduced to Twitter by friends, business peers or other communities. It doesn't happen when adoption is driven by the mass media and celebrities.

The original Nielsen study compared the Twitter retention rate with that of MySpace and Facebook, which each achieved 60% retention at a comparable level of users. But those comparisons make no sense. In the early days of Facebook, usage was spread among college students, a perfect peer community. MySpace adoption was largely among teens - again, perfect for viral growth.

To assess the real retention rate of Twitter, it would be useful to eliminate those casual users who joined Twitter to follow Oprah or Ashton or CNN but never got engaged. I'd like to see what the retention rate is for those who reach a minimum level of engagement - perhaps following ten or more users, posting at least ten tweets and, say, adding their own image to their Twitter profile. I'd guess that retention rates among users who meet those criteria are significantly higher than 40%.

Based on that, I think that the Twitter Quitter issue is largely a canard, though the overall number of Twitter users is also a bit of a mirage, since it includes a lot of these one-time users. Rather than 32 million users with a 40% retention rate, the real figures are probably closer to 25 million users and a 50% retention rate.

Going forward, as Twitter looks to become mainstream, retention rate will be critical. Twitter will be well-served if it continues to cultivate a strong ecosystem of communities. It will be these grass roots communities of interest that will fuel Twitter's growth, not mass-media driven hype.

What do you think?

Open Table Should Buy Yelp

There was much celebration yesterday at Open Table's (NASD:OPEN) successful IPO. In this market, any IPO, especially a tech IPO is cause for celebration, and Open Table shares jumped 50% to more than $31 during its first day of trading after being priced above the initial $16-18 range.

 On its merits, Open Table is not that great a story right now. Restaurants are hurting in the current economy and the company lost $1M on revenues of $56 million in 2008, before things got really bad. More than half their revenue stream comes from the flat fees which they charge restaurants, so that should be somewhat predictable, but will certainly take a hit as restaurants shut their doors. The variable revenues, based on individual bookings will be at even greater risk until the market returns.

While Open Table has strong relationships with restaurants, what would make it a much more interesting company would be to reach out to the consumer side. An Open Table acquisition of Yelp would close the loop, allowing users to search reviews, then book their reservation on one system. It could also create new markets for Open Table. Yelp is well-positioned to become a dominant player in local advertising, and Open Table could potentially serve as the intermediary between buyers and sellers in those local markets. Adding user-generated content and social media to Open Table would position it for future growth as it would be embedded into the daily activities of its core audience. Open Table is a web 1.0 survivor; Yelp brings the newness of the web 2.0 environment and business approach and a nearly obsessive focus on the user.

Of course, Open Table and Yelp have been polar opposites when it comes to their corporate culture.

Open Table has served the restaurant and not focused its efforts on the consumer, while Yelp has shown a willingness to alienate restaurants in order to preserve its customer focus. Could that philosophical divide be bridged? It's worth exploring.

At an estimated valuation of $200 million, Yelp would be worth a third of Open Table, based on its current market cap. But together, the two would be well-positioned to become dominant players in local advertising across a multitude of consumer industries.

Wolfram Alpha: A Well-Hyped Niche Search Engine

Wolfram Alpha launched last weekend to much fanfare. In fact, this scientific search engine received the most hype I can recall for a tech launch since Dean Kamen's Project Ginger (aka the Segway). Of course, today, we're all navigating the sidewalks on our Segways and cities have been "architected around the modern transportation system" (as once predicted by Steve Jobs), so in a few months most of us will barely remember what Google once did.

Sarcasm aside, Wolfram Alpha is an interesting application. Characterized as a "computational knowledge engine", Wolfram Alpha aims to compute answers based on facts stored within its knowledge base. To some extent, it is more Wikipedia than Google.

Its greatest strength is in performing calculations. While Google can do this as well (provided that the formulas are structured correctly), Wolfram Alpha can perform more complex calculations and seems to do a better job at recognizing various constructs of a formula. That's not surprising since Wolfram Alpha is built on top of the Mathematica software created by its founder.

But Wolfram Alpha is largely constrained by its knowledge base. It's as much a content company as a technology company, and as such, its ability to answer questions is based upon the depth of information in its knowledge base.

Beyond mathematical formulas, the Wolfram Alpha knowledge base seems deep in scientific knowledge, not surprising based upon the pedigree of its founder. You can compare the mass of two planets, compute the airflow around an airfoil or compute someone's body mass index.

For most users, however, Wolfram Alpha seems likely to disappoint. One clue to this is the sample searches they present on their home page - enter your date of birth or the city in which you live and Wolfram Alpha returns a list of people born on the same date or basic facts about your city, derived from the CIA World Factbook. In fact, for non-computational queries, Wolfram Alpha seems to me like an online almanac. The last time that I looked at an almanac was as a child, so I'm not quite sure why I'd want one now, but the next time that I need to know what the weather was on the day I was born, I guess I can turn to Wolfram Alpha.

My challenge in using Wolfram Alpha is that there are already individual sites that provide me with most of the answers it can offer. Today's weather in London? I can find that on Weather Underground. The distance between Boston and Cape Code? Google Maps or Mapquest will suffice. Wolfram Alpha consolidates a lot of that information (and might make for a useful iPhone app) but it's hardly the game-changer that it has been hyped to be. So, when I need to compute binomial coefficients, I may jump on my Segway and fire up Wolfram Alpha, but for most of my day-to-day search needs, I'll stick with Google.

SIIA NetGain Conference Wrapup - Day One

This week was NetGain, where the three divisions of the SIIA (Content, Software and Education) conduct concurrent conferences. While the Information Industry Summit is tailored towards C-level executives, NetGain is a bit more tactical and blends content with technology. As with most conferences, attendance was down a bit this year, but that led to better networking and more face time.

The conference content was stronger than last year. Monday morning focused on innovation with a keynote by Judy Estrin (author of Closing the Innovation Gap). While she could have been a bit more dynamic as the opening keynote, Estrin's message was clear - we need to cultivate more innovation in our organizations. And while many organizations focus on incremental innovation, it's the breakthrough innovation and orthogonal innovation that are truly disruptive.

Judy's keynote was followed by a terrific panel moderated by Teri Mendelsohn and featuring panelists Paul Pluschkell, CEO of Spigit, Thomson Reuters Chief Scientist Peter Jackson, PARC President Mark Bernstein  and Ubercool trend analyst Michael Tchong. The panel was terrific, with Peter sharing things we didn't know about Thomson Reuters, such as their cell phone app that enabled Indian farmers to get more fair prices at markets. Michael Tchong was provocative, stating that our current tools are old and ineffective. Tchong also had the best quote of the session: "When I say jerks, I don't mean they're bad people."

The semantic web panel was a pleasant surprise. Having spent four-plus years in the semantic technology space (ClearForest), I'm accustomed to seeing semantic presentations as full of future hype and not grounded in current reality. Darrell Gunter, CMO of Collexis moderated the panel which featured Daniela Barbosa of Dow Jones, Peer39 CEO Amiad Solomon and Steve Nathan, CEO of Parity Computing. Rather than laying out the lofty Berners-Lee vision of a comprehensive semantic web, each focused on the smaller semantic webs which are working today. It was a refreshing look at a compelling space.

By far the best part of day one was the Brewster Kahle keynote. Brewster is a legendary entrepreneur, of course, who today leads the nonprofit Internet Archive. The basic theme of Kahle's speech was that "Universal Knowledge is in our grasp" - from a cost and manageability basis. A few examples:
* Library of Congress is about 26 million books - would be 26 TB of storage - a few thousand dollars of hard drives.
* There are about 2-3 million published works of audio - and it costs about $10 per album to digitize.
* It costs $15 per hour to digitize moving images.

Internet Archive built a data center as a shipping container, which holds 3 Petabytes of information. So, right now, the entire Internet fits into a single 20'x20'x8' box.

The Internet Archive has demonstrated that you really can collect all this information. There are many legal and administrative issues, but technologically you can do it and if you can demonstrate that you are working to help, rather than to gain commercial benefit by doing so, you'll find many key players are cooperative.

Kara Swisher on New Kindle: Thanks, but I'll Wait for Apple

Probably the best quote from the SIIA NetGain conference came during the Q&A at the end of Kara Swisher of All Things D's closing keynote Tuesday regarding the new Amazon Kindle.

Asked what tools she uses in her day-to-day life, she quipped:
"I don't have a Kindle yet because I'm waiting for Apple to come out with something cool that I can overpay for... the Kindle's ugly".

SIIA NetGain Conference Starts Monday

Monday kicks off NetGain, the SIIA's annual west coast event. This year's conference will be held at the Palace Hotel in San Francisco.

This event brings together the three divisions of the Software and Information Industry Association - the Content, Software and Education divisions. It's NetGain for the content division, Software Summit for the software division and Ed Tech for education.

This year's schedule has some great sessions. Brewster Kahle, Kara Swisher, Chris Anderson and author Judith Estrin are the keynotes. There are panels  on cloud computing, workflow applications and a panel on social media platforms which will feature Plaxo's Joe Smarr, Clara Shih of Salesforce.com (and author of The Facebook Era), Facebook's Dave Morin and Pavan Mediratta of LexisNexis.

Alacra will be presenting our new Street Pulse application as part of the new Product Previews segment Tuesday morning. Street Pulse has also been nominated for a CODiE Award. The winners will be announced at Tuesday evening's CODiE dinner.

If you're attending NetGain, or if you just want to follow from afar, we'll be using the #netgain hashtag on Twitter.

Hope to see you there.

Conde Nast Portfolio - Sorry to See You Go

There was a tremendous amount of coverage today of the announcement that Conde Nast would soon be shuttering its Portfolio magazine.

In fact, Portfolio had not received this much ink since the news two years ago that Conde Nast planned to make a nine-figure investment in the launch of a new print product, a decision that seemed audacious, even at the time.

Others closer to the magazine business have shared their thoughts on why Portfolio failed, so I won't dwell on that part of the story. Here are a few of those comments:

Jon Fine goes back to the basics saying that Portfolio failed to engage either readers or advertisers and had the unfortunate timing to attract neither during a huge advertising contraction.

Jim Ledbetter at the Big Money, who knows a thing or two about launching a financial content product during a down market, suggests that with a smaller budget, a weekly frequency, a better website and a better editor, Portfolio might have been able to survive, had market conditions been better.

But I look at the Portfolio shutdown simply from the standpoint of a reader. I don't read a lot of magazines; in fact, Portfolio is the only consumer magazine to which I currently subscribe. I get most of my news from the web, either on my desktop or iPhone and most printed publications just seem stale by the time I read them (yes, that even applies to the New York Times I read on the subway each morning). So I certainly did not look to Portfolio for breaking news. But sometimes, you want the long form story, the kind you can get from The Economist, the New Yorker, Vanity Fair and, yes, Portfolio.

I viewed Portfolio simply as pleasure reading. During its first summer, I found it to be the perfect poolside reading material. During the summer of 2007, when ad dollars were still plentiful, Portfolio had "plop value" that could compare to the weighty fashion magazines my wife would read. Portfolio hired talented writers and delivered solid investigative reporting. While many skewered Portfolio for putting Sarah Palin on the cover of its April issue, I found the Joe McGinniss article, which described how Palin's dealings with the oil companies would ensure that the $40 Billion natural gas pipeline would never be built, to be top notch.

And, of course, Portfolio hired a terrific team of bloggers, led by Felix Salmon, now at Reuters. While the print product was always more of a guilty pleasure, Felix's Market Movers blog was on my daily "must read" list.

I'm not a magazine reader and if I were to start up a new content business today, it wouldn't be in print and it wouldn't have a $100M launch (or a $10M or probably even a $1M launch). But, this summer, when I'm lounging by the pool, I'm going to miss Conde Nast Portfolio.

Twitter for Business - SIIA Event recap

Earlier today, I moderated an SIIA panel entitled "Why Twitter Matters".

I was lucky enough to have three great panelists, which made my job really easy:
Philip Pearlman, Director at StockTwits
Jacob Harris, Senior Software Architect, New York Times
Sarah Austin, Real Time Matrix

The event was sold out, but for those who missed it (or who care to re-live it), here's the video

View Full Screen

Supporting materials including my Introduction to Twitter deck are available here.