Content Matters

In my "50 content companies" posting on Wikipedia, I mentioned the power of wikis to keep up with breaking stories.

Today, from time to time, I have glanced at Wikipedia's coverage of Hurricane Katrina.  Again, I've been impressed.  Without all the hype of CNN (I can do without the "Killer Hurricane Katrina" hype in bold type), the entries in wikipedia provide nearly up-to-the-minute, relevant information, better organized than that of the news sites.  And while the news sites push the video versions of their content, most of us glancing at news during work prefer text.

Wikis aren't perfect.  And, as noted in the headline of the Wikipedia entry for Katrina, readers should not decide whether to leave their shelter based upon the Wikipedia information.  That being said, the information posted to the wiki is a comprehensive view of the Hurricane from a social, economic and humanitarian standpoint.

Following posts about two leading commercial content providers with a combined market value of over $100 Billion, today I’m adding Wikipedia to the 50 Content Companies that Matter.

Technically, Wikipedia is not a company; it’s maintained and hosted by the nonprofit Wikimedia Foundation, led by founder Jimmy Wales.  The Wikipedia site was launched in 2001 with a handful of contributors.  Today, more than 13,000 active contributors maintain more than 1.8 million articles in over 100 languages.  Wikipedia is a top 50 web destination, receiving more than 800 million hits per day.

Wikipedia is clearly the most successful example of applying open source to content.  Contributions are owned by their creators, but all content may be freely distributed and reproduced.

There are many debates about wikis.  By definition, there are no editors who determine whether the content of a wiki is valid.  It is only the other wiki readers and contributors who help ensure that incorrect information or misinformation is corrected.  However, in the spirit of the “Wisdom of Crowds”, the wiki community tends to do a great job on identifying and removing inappropriate materials and even in negotiating compromises in definitions among competing voices.  Looking at any controversial topic – homosexuality, intelligent design, etc., you will see that reasonable and fair coverage is provided to various opinions on an issue.

Where wikis have shined recently is in their coverage of breaking news stories.  Wikipedia coverage of the Asian Tsunamis and the recent London bombings have been more up to date and comprehensive than much of the broadcast news coverage. 

The most compelling aspect of wikis is their involvement of contributors.  This is a dedicated community of users, much like the Well or Pipeline users in the early days of the Internet.  While switching costs between news feeds or browsers are low for users, participation in such a community creates strong bonds. 

For content providers, the concept of a wiki approach becomes compelling.  The investment a user makes in participating in the process completely changes the relationship between provider and user.  Whether it’s restaurant reviews in Zagat, book reviews on Amazon, or sharing highly technical knowledge within a segment of biology on Wikipedia, those users are investing their time and effort into making the product better.  In many ways that feedback mechanism is what makes web publishing uniquely different than traditional publishing.  While it may seem unnatural for publishers to cede some control to users, those who find a model to do so will be rewarded with a loyal and enthusiastic customer base.

P.S. For those of you who find Wikipedia a useful tool, you may wish to contribute to its current fund drive, the proceeds of which will be used to pay for hardware to support the system.

Lots of chatter today about Google's scheduled announcement tomorrow of "Google Talk".  The previews indicate that it's a chat client with VOIP capability; in other words, it's a combination of Skype and IM.

Built on the open source Jabber platform, Google Talk could bring VOIP into the mainstream.  Until now, Skype has mainly been used outside the mainstream.  We used it at my previous company for communications between our NY headquarters and Israeli R&D facilities.  But it still didn't match the convenience of a land line. 

What will be interesting is to see what types of new applications are built around the Jabber framework, potentially making this more than just a tool for college kids to call home.  Will Google use this as a community-building tool, similar to the way AOL leveraged AIM for the teenage set?  Or, will this simply be a me-too product designed to match the talk capabilities of Yahoo and MSN?  Either way, it's probably bad news for an independent like Skype who will have a tough challenge in breaking through in the shadows of the giants. 

Yahoo has rapidly become the most important e-content company on the web.  Pulled from the ashes just a few years ago, Yahoo today is the #1 destination site on the web.  While Google has gotten the bulk of the recent headlines, Yahoo's Overture is a more diversified advertising vehicle, providing brand advertising, outsourced search and contextual advertising, in addition to advertising on Yahoo's own sites.  Another 20% of Yahoo's $821M revenues come from services, including personal ads, job classifieds, sales of music, shopping and more. 

While Google has risen to the top through technology, Yahoo is clearly focused on a more traditional content path, developing proprietary content and striking licensing deals with major news and content providers.  The recent investment in China's Alibaba give it a strong position in China in the web's two largest e-businesses - search and auctions.  Think of a combined Google and EBay - that's what Yahoo could have in China through this investment.  Yahoo paid a huge premium for its investment, but with the anticipated growth of the web in China over the next 5-10 years, Yahoo is clearly well-positioned.

Through its diversified revenue streams and push into international markets, Yahoo is probably best positioned among major e-content companies to navigate whatever changes arise in the coming years.

It seems appropriate to start the “50 Content Companies That Matter” list with Google.

If I had posted this a year ago, many would probably question whether Google even belongs on the list.  They hardly create any proprietary content.  They don’t even house other people’s content in their databases or servers.  In essence, all they do is provide links.  Yet, Google is probably impacting business models of more content providers than any other company today.

This past week, Google raised a lot of eyebrows when it announced its intention to raise an additional $4 billion in the equity markets.  Of course, being Google, it’s decided to based the number of shares in its secondary offering on the first 8 digits after the decimal point in Pi.  Good to see that engineers can have a sense of humor even at the $4 billion level.  Most Street assumptions are that Google is looking to build up its war chest for potential acquisitions into China, Russia and elsewhere.  It probably won’t be a single $4B deal, but rather they will look for deals between $500M - $1.5B.  The transaction could also bode well for computer hardware and telecom manufacturers, as Google will have plenty of cash to upgrade servers, switches and the like.

Regardless of how (or whether) Google spends its $4 billion, they are certainly among the most influential players in the content space.  AdWords is at the heart of almost every company’s advertising campaigns, and the AdSense ad network program has enabled content providers to capture advertising revenues without hiring sales reps.  The existence of Google has forced advertising-supported publishers like Thomas Register to completely overhaul their business models.

Perhaps most interestingly, Google has become a dominant content player by ignoring all the “rules” of the content markets.  They haven’t reached out in a meaningful way to partner with publishers (in fact, they’ve alienated quite a few through the Google Print initiative) and their “standard” model does not provide the flexibility content buyers and sellers have come to expect.  Yet Google is set to capture more eyeballs and more of the desktop through its Google Maps, GMail, Desktop Search, Google Video and new advertising programs.  With version 2 of the Google Desktop, Google has begun inching its way into Microsoft's territory, going beyond Search to include file access (and thereby skip the Windows Start menu).

It’s clear that Google is impacting the content market in a big way and will continue to do so into the foreseeable future.  While they remain difficult to deal with, any publisher who ignores Google will do so at their peril.

With this posting, I begin a list of the Fifty Content Companies That Matter.  First, to answer a few questions that may have popped into your head:

1.     Says whom?  That’s an easy one.  It’s a list of the 50 (or so) companies which I believe are having an impact on the content industry.  The list is based solely upon my opinions, although I welcome posting or emailing of comments, feedback and suggestions.

2.     Based upon what?  Again, this is a largely subjective set of criteria – but will reflect my opinion as to which companies are demonstrating innovation either technological, sales & marketing, business model or otherwise. 

3.     What types of companies will be included?  The list may include “traditional” media companies, e-business/e-commerce content companies, enabling technologies and others impacting the way that content providers deliver and content users consume information.  It may include both b2b and b2c content, although due to my focus areas it is likely to emphasize the b2b world.

4.     Is this a ranking?  No, it’s a list.  So, the order in which they appear should not be construed as any measure their impact on the content market. 

In other words, I will use this list as a means to recognize innovators in the content industry and to share my thoughts on the potential impact of their efforts.

Any good list should be somewhat controversial, so please don’t be shy with posting or sending comments and suggestions.  Thank you!

Google has announced that it will take a six month breather from digitizing any more publisher content from libraries, under the Google Print program announced a year ago.

The goal will be to provide publishers a window of opportunity to decide which published works they do or do not want included in the Google offering.  Under the new model, publishers can either opt-in or opt-out by providing lists of works they want included or excluded. 

When Google first announced its Library project in October, 2004, they did it in typical Google fashion.  In other words, rather than approaching some of the major publishers and striking a deal on how to proceed, Google bypassed the publishers entirely, partnering with library centers.

It's good to see Google rethinking this initiative.  While the concept of libraries without walls is a compelling one, it's worth remembering that libraries don't own their content and that for reference and data publishers, library license agreements were based upon assumptions of usage.  If you change those assumptions, you're going to see data publishers pull out of the library market, or at least change their license structure.

At the same time, this whole issue makes book publishers seem sort of like the music industry with its head in the sand.  As John Blossom points out, the reaction by publishers to Google Print "seems to be more about publishers  awakening to the opportunities for books online rather late in the game."

A Today Show story this morning focused on the use of Google Earth and how soldiers in Iraq were shocked to see how it provided a fairly accurate rendering of an active base there.

For the past 20 years, the field of bioethics has been evolving to answer the question of "just because we can do something, does that mean we should do it?".  Obviously, with issues like human cloning the pervasive answer has been "of course not". 

Now it seems that technologists have to begin to explore the same issues and do it from a similar "philosophy-based" approach.  Do peer networks make it OK to illegally traffic intellectual property?  Should advanced data mining or text mining techniques be allowed to move forward even if they violate individual privacy rights?

The Google Earth question is an interesting one.  In some ways, it reminds me of a conversation I overheard at a supermarket checkout about 3 years ago.  Two women (I believe it was a mother and daughter) were talking about the Internet.  The older one, roughly 60'ish, said that her son had shown her how he can enter her address on the computer and get a set of directions of how to get to her house.  Her comment was "that's very scary".  My thoughts, of course, were that if you know the location you are going to, the technology to find that location has been around for many years - maps were initally developed by the Babylonians around 2500 BC.

At the same time, I think that it is reasonable for technology providers to recognize potential pitfalls of their technologies and be willing to adapt them for the "greater good".  In this case, it seems reasonable to me that if the DoD were to provide Google with certain lats and longs, that they should be willing to place limitations on views for those locations - either generating fuzzy pictures or simply restricting the user's ability to zoom at that level.

Just as we place limitations on data mining for law enforcement or intelligence (John Poindexter's infamous TIA project), we can balance the desires of commercial users with the need to protect our armed forces during active war efforts.

Factiva announced last week their new corporate reputation analysis tool. This is their second effort in this market. In spring of 2004, Factiva joined with IBM's WebSphere group to focus on corporate reputation management. WebSphere was attempting to converge IBM's hodgepodge of text analytics tools together with its broad infrastructure, developing a massive new platform for unstructured data. IBM has adapted its model, using WebSphere as a platform for other analytics applications (ClearForest, Cognos, Attensity and others) while this aspect of the WebSphere-Factiva partnership has gone quiet.

Factiva, however, has stepped forth with a new initiative in this market. The goal of reading blogs, websites, message boards and the like, and giving companies an early view of customer sentiment is a good one. At the same time, the challenge will be tremendous. Having been involved in a few projects designed to identify customer sentiment from text, my experience has been that this is not something easily delivered. Extracting facts and events from published text is difficult; disambiguating positive from negative segment in informal text such as chat and newsgroups will be daunting. The lack of sentence structure, poor grammar and spelling are bound to create challenges for NLP applications (just ask your PC to interpret the :( symbol).

Factiva has overcome its biggest limitation - accessing content, by partnering with Intelliseek. While Factiva's own content is a major component, the real value of this system is the ability to assess the informal "buzz" from websites, blogs and newsgroups. That may enable the system to serve as an Early Warning indicator, able to sense market opinions in advance of more formal channels.

Factiva's approach, using automation, combined with domain experts, promises to be the biggest push in this market do-date. That said, I believe that it will be important for the early adopters to manage their expectations, as automated tools can still only do so much in this area. Regardless, I hope that the early adopters embrace these initial capabilities so that the efforts continue.

Technorati's updated "State of the Blogosphere" reports, delivered as Part I and Part II, show some pretty amazing growth during the past six months.

Today, they index over 14 million blogs worldwide, double what they indexed in January. Of these, they indicate that more than 55% are "active" (defined as at least one post in the prior 3 months), with more than 80,000 new blogs per day. About 13% of blogs are updated at least weekly.

Technorati now indexes more than 900,000 blog posts per day (or 10 per second), more than double what it was seven months ago.

Much of the growth comes from new blogging tools in AOL and MSN, along with dedicated sites like Blogger and LiveJournal. Mobile blogging is beginning to register, with people finding new uses for their camera phones and similar.

One interesting note from the report is that posting activity peaks between 7am - 12pm PDT (10a - 3p eastern) and is 5-10% slower on weekends. In other words, this is not simply teenagers posting their diary to AOL after school, but means that blogging is occurring heavily in the workplace. Assuming that bloggers are also those who are reading RSS and blogs, it might suggest that the RSS market will be a strong opportunity for B2B publishers and content providers in the near future.

Cover story in the August Fortune mag is "Yahoo and the Future of Advertising". While the world spent most of the past year focusing on the incredible multiple that Google was getting, Fortune takes a closer look at what Terry Semel and the Yahoo team have "quietly" been doing.

While the two companies have similar revenue results (Yahoo's Q1 was $821M vs. $794M for Google), the revenue mix is quite different. Search advertising on their own site accounts for 83% of Google's revenues, but only 22% of Yahoo's. Outsourced search and contextual advertising is the bulk of the remainder for Google (15%), while it's nearly 28% for Yahoo.
But where that's the end of Google's revenue stream, it's only half of Yahoo's. The single largest component, representing 29% of Yahoo's revenues, come from brand advertising. Another 20% come from various services, including job classifieds & personal ads, sale of broadband access and various niche targets (mail, music and more).

The article shows how Yahoo has positioned itself to be the top recipient of online brand advertising - in other words, as "traditional" advertisers move money from traditional media to online, their first stop is Yahoo. What this means is that Yahoo is starting to take dollars away from its content partners. The relationship between Yahoo and its media and content partners is shaping up similarly to those relationships between content aggregators and content providers in the past. Eager to gain access to new distribution channels, content providers will also be wary of Yahoo, particularly as it begins to develop its own content. While initially Yahoo's original content is mostly non-threatening (job listings in Hotjobs, personal ads, etc.), over time there will be the temptation to replace content it licenses with content it develops (as Bloomberg, Microsoft and others have done over the years). It will be a careful balance. Those who eschew Yahoo will find that they are missing out on lucrative potential markets, while those who provide unconstrained access to all their content are sure to have many sleepless nights.