Content Matters

BankRate this week made two significant acquisitions, acquiring MMIS/Interest.com and FastFind (Wescoco LLC), strengthening its leadership position in the consumer mortgage and interest rate market.

MMIS publishes mortgage tables in newspapers and also runs the Interest.com website, a consumer site that connects borrowers and lenders.  FastFind is a web-based lead generator, also in the booming mortgage/refinancing market.

The MMIS acquisition expands BankRate’s network of advertising vehicles, serving up more page views and providing space for banner ads.  This expands Bankrate’s presence in their core market.  Adding FastFind should provide some new opportunities to close the loop between borrowers and lenders, letting Bankrate increase the amount of revenue it generates from its top accounts.

Bankrate has done an impressive job the past five years.  Starting as a small newsletter, The Bank Rate Monitor, Bankrate went a bit haywire during the dot.com days, changing its name to ILife and launching various consumer finance portals, including ILife.com, Consejero.com and Garzarelli.com.  Elisabeth DeMarse was hired as CEO and brought focus and discipline to the company, shedding unproductive assets and moving the stock price from around a quarter to the high teens in a fairly short period. 

In 2004, Tom Evans, former GeoCities head, was named CEO and has continued the growth.  With the new acquisitions, BankRate is forecasting revenues of $78-79 million this year and net income of $1.23 per share.

With mortgage rates staying on the low side, and consumers continuing to refinance, Bankrate has thrived in recent years.  They have diversified their revenue streams somewhat, to reduce their dependency on the mortgage refinancing market, but it will be interesting to watch how they perform if rates rise and home building slows.

I’m adding LinkedIn to my “50 Content Companies that Matter” list, although it’s more for their concept and mindshare than their execution to-date.

Social Networking is a concept that has been active in the consumer space for a while (Facebook, MySpace and others), but has barely taken hold in the professional markets.  At the same time, there is tremendous interest in this concept in a number of industries.  Many knowledge management projects of the past five-to-ten years were designed with the goal of leveraging relationships for business development, particularly in the investment banking and professional services industries.  Unfortunately, these technologies were not scalable and often required lots of manual data updating, never fulfilling their promise.

Reid Hoffman and the team at LinkedIn took a different approach.  Rather than a centralized institutional social networking application, they developed a personal version.  Enter your contacts and invite them to join your network.  Over time, you’ll find that many of your peers have done the same and your network will extend to thousands of people.

The good news is that LinkedIn has attracted more than 4 million users to date.  When I log in, LinkedIn tells me that my network consists of more than 619,000 of these users.  But, in b2b social networking, I know that not to be the case.  I can ask one of my network contacts to introduce me to one of theirs (2 degrees of separation).  But, that’s as far as the network extends in the business world.  Relationships that are three degrees or more may be useful in drinking games (“6 degrees of Kevin Bacon”), but few people will open up their valuable business network to a stranger, even one referred by someone in their own network.

That's one of the reasons why LinkedIn has yet to nail their business model.  While almost everyone I know is a member, few have integrated it into their regular processes and fewer still use the actual request process to get networked.  Instead, usage is typically like that which a recruiter colleague described.  He uses LinkedIn to search for potential candidates.  Using the result set, rather than reaching out to his contacts for introductions online, he just works the phone as he has always done.  For him, LinkedIn is a useful sourcing database - a reference database - but it is not a social networking application.  I know many others in sales who use it in a similar manner.

So, if I’m not confident in the model, why have I added LinkedIn to the 50 Content Companies that Matter?  For one, it’s raised the awareness of the concept of social networking in the professional markets.  Second, it’s helping to change the model of database publishing.  Rather than a content company identifying relationships from its own content, LinkedIn has built a model in which the users are the editors and the community builds the content.  Whether or not LinkedIn ultimately succeeds as a standalone business (and I think it likely to be acquired at some point), it is helping to change the way that content is created and delivered.  And for that, it’s clearly one of the 50 Content Companies that Matter.

 

I’ve read a lot of comments recently over whether the new Google Base is likely to become a “Category Killer”, taking large amounts of business away from eBay, Craig’s List, Yahoo Shopping and even Amazon.

While Google certainly has the money to make a big splash into any market, I don’t think that their entry into the classified space will be the category killer people fear.  Two factors will continue to weigh heavily in favor of some of the existing players:

1. Specialization:  EBay has developed an extensive community of buyers and sellers, with its ranking system at the heart of its success.  Will Google, a technology-driven company, put the work in to build its community effectively?  Amazon, through its reviews, has become the first place most of us look to assess a consumer purchase.  Others have tried to emulate that, but none have succeeded. 
2. Local presence: Craig’s List has been able to cultivate a local feel in its markets, critical for classified sales of a car, a sofa or guitar.  The usability of Craig’s List is strong, as they built their system with users, not technology in mind.

One downside to Google Base will be its massive size.  Because it’s free and it’s from Google, I expect the database to become huge, with many commercial enterprises spending numerous hours keying in all of their products.  That mass will likely make it unwieldy, unless sellers do an exceptional job of tagging (unlikely).

I think that Google Base will certainly have an impact.  It probably will continue to accelerate the decline of newspaper classifieds and have modest erosive effect on eBay, and Craig’s List.  But, technology does not always make for the best user experience.  I’ve tried a few times to use Yahoo Shopping and always abandoned it, frustrated.  The existence of Google Base may require eBay and Craig’s List to continue to improve their user experience, and it may push the price of a future Knight Ridder acquisition down.  But, it’s unlikely to become the dominant player in the classified space in the near term.

Gather.com this week launched their site, a social networking site consisting of a set of blog-based communities.  Gather’s approach is to create communities of user-created content (blogs, podcasts and such), and also can be the online host for existing offline communities such as a book club.  Gather’s twist is that they have assembled a group of contributors to public radio stations to author content.  So, when you post your blog to Gather, it could easily be commingled with content with audio from Minnesota Public Radio or the “Featured album of the week” from WXPN radio in Philadelphia.

Gather’s business model is serving up ads alongside the content.  To gain user participation, Gather has a ranking system.  Users rank the postings that they read, and contributors whose postings are read most frequently or get the highest ratings get “points” which can be converted to merchandise via Gather partners.

What I like about Gather is that it’s reinforcing the concept of tagging content.  The communities are built based upon tags, so the better you tag the content, the more likely it will be read.  I don’t fully get the public radio connection, except that it might target certain demographic groups.  Gather’s Board includes several executives from their lead investor - American Public Media Group (parent of Minnesota Public Radio), and should have credibility within that community, but I’m not sure what value that adds to a social networking site. 

We seem to be entering version 2.0 of the online community world, and I still think there will be many more failures than successes.  Just as in the real world, online communities need to have a sense of purpose.  While a community like MySpace might address the needs of teenagers seeking to share indie music, I’m not sure that easily translates to the public radio demographics.  Only time will tell.

I am adding The Public Library of Science (PLoS) to the Fifty Content Companies that Matter.  PLoS is a not-for-profit, open source publishing company whose aim is to make scientific and medical literature available to the public. 

For those without a background in the STM market, there have long been competing interests in this space.  Journal publishers Elsevier, Wolters Kluwer and others, along with content aggregators including Ovid, Dialog and ProQuest, have built substantial businesses in the aggregation and dissemination of scientific literature.  At the same time, consumers of this content (those in the medical, life science and health research fields) can only access that content in the costly journals to which they subscribe.  Add to the mix the fact that much of the scientific research is funded with grants based upon taxpayer dollars, and you have an ongoing conflict between content authors, publishers, aggregators and end-users. 

Enter the Public Library of Science.  Launched in 2003, the PLoS has begun publishing journals (PLoS Biology, PLoS Medicine, PLoS Computational Biology and PLoS Genetics), which have received critical acclaim throughout their industry, while making all such content freely available for use by anyone with web access.  The PLoS model was based upon a similar initiative begun a few years earlier by UK publisher BioMed Central. 

Funding for the Public Library of Science comes from the authors in a pay-to-submit model, but that has been offset by grant programs from a few key institutions, such as the Howard Hughes Medical Center and the National Institutes of Health, which cover publication costs in their research grants.

While I am not convinced that the author pays model will succeed (after all, most submissions are not accepted, so I question how long people will pay to submit something that is ultimately rejected), the open source publishing model makes some sense in the scientific markets. 

Unlike the business market where users can make intelligent decisions based upon a small sampling of the data (for example, a fundamental analyst can subscribe to a single earnings forecast database), the scientific community is much more effective when they can access all relevant content.  A researcher studying protein pathways wants to know whether anyone has done research on the relationships between given proteins, regardless of which journal the information may have been published in.  During my time in the text mining market, there was tremendous interest from life sciences companies in “mining Medline”.  Unfortunately, the Medline database only provides abstracts, which do not provide the level of detail needed to uncover truly valuable information.  In order to mine full text, the user would need access to all of the underlying content, spanning millions of documents from hundreds or thousands of journals from dozens of publishers.

Whether the Public Library of Science succeeds in the long run I cannot forecast.  But in the short time since their launch, the PLoS have forced many STM publishers and aggregators to rethink their model and embrace concepts which they would not have considered a few years earlier.  For that, the Public Library of Science is clearly one of the 50 Content Companies that Matter.

For day two of the InfoCommerce conference, the focus shifted largely to working with search engines.

Today’s keynote was delivered by Craig Pisaris-Henderson, CEO of MIVA.  MIVA is the current name for what most of us knew as FindWhat.com (as a marketer who likes names that convey what a product does, I have to admit that FindWhat seems much more compelling to me than MIVA, but that’s a discussion for another day).

Craig was making the argument that Yahoo and Google are publisher’s adversaries and that MIVA’s focus on the publisher, rather than the user, was a better solution.  The audience did not seem convinced, voicing the opinion that “if the users want to use search, then you should be there to receive their traffic.”  While MIVA has done some interesting things, I think that you need to go where the traffic is.  While there are pros and cons to ad networks, I’m not sure there’s anywhere else to generate that level of traffic.

Two panels were the most compelling presentations of the day.  “Search Engines: Rep Firms of the Future” focused on the question of “is Google friend or foe?”.  Led by Sean Brooks of TechTarget, Joe Douress of LexisNexis Martindale Hubbell and Jeff Leibowitz of the Laredo Group, the theme of this panel was that Google and Yahoo are there, so embrace them.  At the same time, publishers own an amazing amount of valuable content, so while search engines have their place, premium content providers can establish strong positions and Google will not take over the world.

On a more tactical basis, the last panel of the day was “The SEO/SEM Bake Off”.  Aaron Kahlow, CEO of BusinessOnline, Diane Burley, President of PureContemporary.com and Todd Watts, Director of Marketing for Liquidity Services, Inc. debated the merits of organic vs. search marketing.  Aaron Kahlow led off with a strong and compelling argument that SEO was where publishers should focus, yet today we spend 80% of our dollars on SEM.  Diane Burley used a case study of the first year of her online magazine to show how to balance various approaches.  Todd Watts was able to demonstrate that SEM could play a great role in balancing SEO.  While no one can guarantee that they can give you the top position for each term in SEO, SEM allows you to buy the ones where you’re not getting the SEO results you want.  Reinforcing the concepts mentioned by Anne Holland of MarketingSherpa yesterday, the panel agreed that publishers bought SEM because it was easier to understand and execute.  Better results could be achieved by investing more in SEO, then using SEM to fill in the gaps.

Overall, this year's InfoCommerce Conference was compelling, with a strong mix of traditional and new publishers.

For more coverage of the InfoCommerce Conference, check the detailed session notes taken by John Blossom at Shore Communications as well as the comments on Dave Jung's b2blog.  Dave spoke at one of the breakout sessions.

Today I’m blogging from the InfoCommerce Conference in Philadelphia.

InfoCommerce Group, led by Russell Perkins, is the premier consulting firm focused on database and directory publishers.  This year’s conference brings a blend of traditional and new publishers, with particular focus on the role of quality in the content industry.

Richard Malloch, President of Hearst Business Media, was the keynote speaker.  Malloch provided an insightful and rare peek inside a private company that often stays under the radar.  Focusing on their healthcare business, Malloch outlined a company that has transformed itself to partner with its clients (hospital systems, pharmacy chains and others), and now can claim an average customer life expectancy of 40 years.

Chris Kenton, CEO of Global Fluency and Business Week Online writer and provocateur, spoke on “Making Quality Real”.  In a compelling 20 minute presentation, Chris blew up many traditional marketing and b-school assumptions. 

A hands-on workshop was led by Anne Holland, Chief Sherpa at MarketingSherpa.com.  Anne provided updated results of their analysis of email open rates, best practices for email response forms, use of Heat Maps to better understand user behavior on search results pages and other key topics.  One interesting point Anne raised was the huge focus on SEM, while investing in SEO will have a bigger impact for most clients.  Her rationale for why we all focus on SEM is that marketers have spent their career focusing on the creative and on ad-buying.  It’s easy and we know how to do it, while SEO is techie stuff focused on algorithms and quantitative data.  So, if you like the creative side more, go find a specialist to help you on the SEO side.  Anne closed her presentation with “sites for Content Companies to watch in 2006”.  I was pleased that three of the five she mentioned are among my “50 Content Companies that Matter” list – De.licio.us, Wikipedia and Google; with Flickr and PubSub.com (a blog search engine) as the others.

My favorite session of the day brought three non-traditional publishing executives together.  Jim Fowler, Founder of Jigsaw Data, Lou Morsberger, CEO of ValueStar and Tim DeMello, Founder of Ziggs.  Each of these companies are focused upon user-contributed content with little or no human interaction.  Jigsaw has pioneered the “business card swap” approach, applying lessons from eBay and others.  Ziggs’ focus is enabling users to take control of their identity on the web.  ValueStar is applying ratings to local services (plumbers, home repair, auto repair, etc.).  Both Jigsaw and Ziggs are delivering astonishing growth rates – each adding more than 10,000 contacts per day.  According to DeMello, there are more than 25 million people searches done on the web each day, and a typical professional probably gets searched about once per day.

Day two, tomorrow, should be equally compelling, with panels including representatives of Hoovers, Factiva, Aviation Week, Thomson Gale and others, plus drill-down sessions on SEO/SEM and RFID.

For more info on the InfoCommerce conference, take a look at John Blossom's blog notes from the show.

Today, I add Endeca to the Fifty Content Companies that Matter.

Endeca offers a variation on search which they call Guided Navigation.  Guided Navigation is a fairly simple concept, which enables users to drill down on various attributes of their search results, to continually narrow and refine the results.

Endeca’s core market is the e-Commerce space, with their Endeca InFront® product.  Their strength is their ability to combine unstructured and structured data to enable users to quickly find relevant results.  InFront® is used by numerous e-commerce sites including Barnes & Noble, Circuit City, Petco, WalMart and others.  For a good example of how InFront® improves the search process, take a look at the CircuitCity.com website.  Enter “DVD” in the search box and you’ll get nearly 50,000 results.  On the left of the screen, you’ll see all the various product categories which match.  And, the InFront® difference, is that it will dynamically update with the number of matches in each.  If you click on “Gifts under $100” (which has 31 entries), you’ll see a dynamically updated list by brand.  The Circuit City site is a simple, yet clear example of how Endeca InFront® improves the e-Commerce search process.

Endeca goes beyond e-Commerce.  Their ProFind® search solutions are being deployed in the publishing space by Directory publishers such as Classmates.com, enterprise search clients such as John Deere, IBM and others, and within the government intelligence community (DIA among others).

The technology behind Endeca is powerful, but the simplicity of its interface is what makes it successful.  During the past year, they have expanded their operational areas (sales, technical and customer support), enabling them to add 100 clients during that period.  While users tend to think search=Google these days, within the enterprise and specialized applications like e-Commerce, there remains huge room for growth among innovators like Endeca.  For that innovation, Endeca clearly is among the Fifty Content Companies that Matter.