Content Matters

You may have noticed a new tag cloud on the  Content Matters blog.  Entitled "Content Buzz Cloud", it's on the upper left of the blog.

The cloud is a "Swicki" and it comes courtesy of social software provider Eurekester.  At first glance, it looks simply like a web 2.0 tag cloud interface a la delicious.  But, the swicki is more than that.  Behind the tag cloud is a vertical search engine.  Similar to Rollyo, the Swicki lets you select specific web sites to include in your index.  It also includes a full web crawl, but the matches from your vertical sites show up higher in your results.

So, what's the social software angle?  Well, a Swicki is designed for community tuning.  Users can tune the results by removing sites that don't match, by adding new sites or by marking certain sites to go to the top of the results.

For Content Matters, I've focused the Swicki on content-related topics and sites.  Swicki is still in beta, and some key features, such as including select blogs, are yet to be released (today, it includes all blogs in its index).  So, how are the results?  Try a few searches and let me know.

Last week, Apple celebrated the one-billionth download of a song via iTunes. A billion songs in three years is a pretty big number. Apple hit the 100 million level in July, 2004, cleared 200 million by December of that year and 500 million by summer of 2005. Today, nearly 100 million songs are downloaded each month on iTunes. 

Interestingly, this achievement comes the same week that the Artic Monkeys CD, “Whatever People Say I Am, That’s What I’m Not”, was released in theUnited States. For those who haven’t followed the story (or the band), when the CD was released in the UK about a month ago, it was the fastest-selling debut album in British charts history, with more than 360,000 CDs sold its first week.

There are two reasons why the CD achieved that goal. First, it’s simply a great CD. There’s not a bad song on it, and some of them are great songs with staying power. But that alone won’t get you to #1. Instead, what the Arctic Monkeys did was release their music over the Internet last year, before they even had a record contract (they eventually signed with indy record label Domino Records). Word of mouth, club exposure and blogs helped build a buzz around this hot new band, so when the CD came out, the cash registers rang. 

The other interesting aspect of the music download market is the so-called long tail. While the Arctic Monkeys may sell 360,00 CDs their first week, the bulk of the revenues from record companies come from sales of its existing catalog. The Internet has transformed this market as physical inventory is not required, so even songs that only sell a few times per month can be cost-effective to maintain. I find myself frequently using iTunes to purchase individual songs I may have had only on vinyl from many years ago, where I would have been unlikely to buy a full CD for just that song. Just this week, I purchased individual songs from the New York Dolls, Sweet and Iggy and the Stooges, simply to fill gaps in a playlist.

I believe that the transformation of the music industry has ramifications for the b2b content market.

The iTunes model proves that people like to buy content when, where and in the quantity they wish. Having a single storefront makes the process simple and eliminates the challenges of micropayments, since users regularly purchase more songs, so modest transactions are still profitable. 

Today, b2b information users are demonstrating that they, too, want flexibility in how they purchase content. While many traditional content providers still cling to a subscription-only model, I’ve seen many begin to experiment with pay-per-view and similar transactional models. 

As with Apple’s iTunes, business content tends to sell more when it is aggregated with similar information. Your core user, who knows your name and URL, is often already a subscriber. The transactional market is serving a customer who doesn’t know you or doesn’t immediately think of you as a solution for their need. These users are going to use search engines and also go to trusted sources to find the content they need. That’s why marketers head to a site like Marketing Sherpa, and researchers and business information users come to the Alacra Store or Factiva. One-stop shopping is important for these users and they would be no more likely to seek out individual publisher sites than a music lover would be to seek individual record label sites for purchasing songs. 

The aftermarket for market and investment research can also be very compelling. This is the long tail of the content industry. Whether for analysis, context or litigation support, many people have needs for historical research or news. And, for this market, there’s no markdown required. The value of “need to know” content remains high within this research aftermarket. 

The transformation of the music industry has been slow, painful and not very friendly to customers. Battles over DRM continue and the interests of the user remain secondary. While the business information market has a much lower presence than popular music, our industry has had similar tendencies. While there’s a gut reaction to call the lawyers whenever new business models emerge, smart content providers are seeing the opportunity to generate new revenues and open new markets by embracing these changes.

  Morningstar is synonymous with mutual fund ratings today.

With revenues exceeding $200M and a market cap of more than $1.5B, Morningstar has become a dominant player in the personal finance market, and the 800 pound gorilla of mutual funds.

That was not always the case, however.

Throughout the 1980s, Lipper and CDA/Wiesenberger (now a division of Thomson Financial) were the leaders in mutual fund information. While Lipper focused largely on the institutional market and Wiesenberger focused on information for brokers and financial consultants, Morningstar sensed a shift in the market. The market for mutual funds was changing in the mid-1990’s, with investors becoming more savvy and focusing on self-directed investments. This created an opportunity for content providers to provide mutual fund data to a retail audience.

Morningstar realized early on that in order to capture the consumer market, they had to simplify the information they provided. While brokers were expected to understand risk and performance, the average consumer did not. Morningstar created a simple four-star rating system which anyone could understand. A consumer could simply select an asset class, then review those funds which Morningstar had rated highly, to help in their selection.

Two trends during the 1990s converged to help fuel Morningstar’s growth. The first was the emergence of the Internet. This helped in two ways. Personal finance became one of the first “killer apps” of the web, providing users with information which they’d never had access to before. Ten year earlier, the most information that most people had was an S&P tearsheet sent by your broker. Now, with information plentiful, consumers could make investment decisions without using a full-service broker. A second Internet-driven factor was the dot.com boom, which fueled overall interest in investing.

The second key trend was the explosion in the mutual fund market. Shifts from defined benefit to defined contribution plans, combined with rapid growth in the 401(k) market, resulted in many thousands of new funds from hundreds of new investment management firms. Where it had previously been moderately challenging to compare fund performance between a handful of providers (Fidelity, T. Rowe Price, Dreyfus and others), it was now nearly impossible to navigate this new world with tens of thousands of choices.

Morningstar successfully positioned itself to take advantage of both of these trends. Its rating system gave consumers an easy way to sift through the masses of choices, winnowing results by asset class, rating and performance. Morningstar was also quick to adopt the web as its primary platform, providing content directly to end users while also licensing their content through various channels. By the year 2000, Morningstar had established itself as the dominant player in the mutual fund information market.

In 2001, Morningstar applied its ratings success for mutual funds into stock ratings. By 2002, the company surpassed $100M in revenues.

Today, Morningstar continues its growth. Late in 2005, it acquired Ibbotson Associates, a leader in asset allocation technology and services. The Ibbotson acquisition strengthens Morningstar’s position in investment consulting and retirement services, while providing an enhanced software platform for asset allocation.

Morningstar revenues for 2005 were $227 million, with net income of more than $31 million, as compared to 2004 figures of $179 million on the topline with net income of $8.8 million.

Under the leadership of founder Joe Mansueto, Morningstar has grown substantially during the past 20 years, successfully embracing change in a dynamically changing market. It has leveraged its use of ratings to create and nurture one of the strongest brands in the information industry. Morningstar has successfully transitioned itself from mostly free content (during the dot.com heyday) to a blend of free and premium content today, and has also effectively developed both direct and indirect channels for selling its content. With last year’s acquisition of Ibbotson, Morningstar indicated that it understands the need to bring content, services and technology together, to create higher value workflow solutions for its customers. Its adaptability and willingness to embrace change make Morningstar one of the Fifty Content Companies that Matter.

In a major step for new CEO Rich Zannino, Dow Jones today announced an extensive reorganization.
For the first time, Dow Jones will organize itself around markets, rather than its distribution channels (print, electronic and community newspapers).

• Gordon Crovitz will lead the new Consumer Media Group including the WSJ, Barron's, MarketWatch and SmartMoney.
• Current Factiva CEO Clare Hart will run the Enterprise Media Group, consisting of DJ Newswires, Dow Jones Indexes, the Factiva and Stoxx joint ventures and Dow Jones Financial Information Services.
• John Wilcox will lead the Community Media Group, consisting of the daily and weekly Ottaway community newspapers.

Changing the focus from channel and manufacturing process to customers and markets is one that is long overdue.  But it's a shift that will not happen easily.  Large content companies like Dow Jones have too many sacred cows and it will be interesting to see whether they have the political will to adapt to the needs of their markets, even if it means killing or transforming some of their traditional products. 
It will also be interesting to see how Clare Hart, after leading a fairly nimble and forward-looking organization, can adapt in her return to Dow Jones.  One of the key things that has made Factiva a success is the fact that it was, in essence, built from scratch.  Dow Jones, with legacy infrastructure, legacy products and too much legacy thinking will be a tougher business to turn around.  I wish Clare and her team much luck and look forward to seeing their imprint in the months and years to come.

Update:  Staci at PaidContent provides some insights on the organizational reporting structure beyond the three new Group heads.  Todd Larsen, formerly head of Dow Jones Consumer Electronic Publishing, will be COO of the Consumer Group.  She also points out that under this new structure, the larger Consumer Media Group does not have the profitability that the electronic publishing group provided.  In fact, in a memo from Gordon Crovitz to his staff, he points out that "In 2005, if this group had existed as a publicly reporting division of Dow Jones, we would have had revenues of just over $1 billion, but would have had an operating loss of $2.5 million". 

John Blossom, at Shore Communications, has written an interesting article on TechTarget.
TechTarget, a company scheduled to be profiled in Content Matters in the near future, is a lead generation firm which competes in the same space as KnowledgeStorm, one of my 50 Content Companies that Matter.

John's piece comes just after TechTarget announced its 2005 revenues of $70M, up 168% from 2004, through a combination of acquisitions and organic growth.

The lead generation space continues to exhibit great strength, though content companies looking to simply put a new front end on their content won't make the cut.  As Shore analyst Janice McCollum points out, "Essentially, through its qualifying process and the LeadPRISM tools, TechTarget serves as an outsourced prospecting, qualifying, and tracking process for vendor sales departments."  The success stories in lead generation come from companies that have either embedded themselves into their customers workflow, or even better, replaced that workflow.

BlogBurst is a new service to syndicate blog content to mainstream media outlets.  Created by Social Software provider Pluck, Blogburst will distribute content from select blogs (Blogburst is by invitation only) to the online sites of newspapers and other traditional media.

Blogburst receives licensing fees from the newspapers it sells the content to.  Initially, bloggers receive no compensation, but gain wider exposure.  According to Search Engine Journal, Pluck plans to compensate bloggers once they finish the beta period.

So, is it worthwhile for bloggers to participate?  I'd say so.  Prior to Blogburst, one of my Content Matters posts was picked up by the WashingtonPost.com and generated a nice spike in traffic.  Most bloggers today are more focused on exposure than on revenue, so syndication is a positive.  Conversely, as Darren Rowse of ProBlogger points out, you have to be OK with the idea that your syndicated posts may show up higher in search results on a partner site than on your own.  I have begun to syndicate Content Matters on Blogburst, but that's a decision each blogger will have to make for themselves.

For more takes on Blogburst, look at BlogSEO and of course, TechCrunch, who hosted the party where Blogburst was announced.

KnowledgeStorm, the lead generation provider for technology companies, has launched a new service called FindTech Insights, in conjunction with IT Business Edge.

FindTech Insights are a series of weekly e-newsletters covering key IT and business topics such as Maximizing IT Investments, Managing Compliance Standards, Outsourcing for Competitive Advantage and others.

The reports are delivered as weekly email newsletters.  The content is based around white papers and other downloadable reports, combined with original editorial and blog content from IT Business Edge.

The results are a compelling and targeted weekly newsletter that drives readers to read and download articles and reports.  KnowledgeStorm has already demonstrated that they can leverage SEO and SEM to drive traffic and qualified leads.  Now, with FindTech Insights, they have a second channel for lead generation.   Currently, the newsletters are delivered via email.  Considering their IT market, I think we can expect to see RSS versions following soon.

As I have blogged in the past, KnowledgeStorm has done an impressive job in helping technology companies generate (and close) qualified leads.  But, they remain in a very competitive space with competitors like TechTarget.  Rather than sitting back and simply riding the SEO wave, it's clear that KnowledgeStorm is exploring new ways to generate value for customers.  Content providers seeking to enter the lead generation space could do a lot worse than to emulate KnowledgeStorm.

Blogger Robert Scoble has done a quick blog search test to see how quickly the search engines pick up new posts.
For his test, Scoble has created a fake word, brrreeeport,and has asked bloggers to add that word to one of their posts (as I have done here).
Scoble is monitoring the number of posts that appear on Google Blog Search, Technorati and Feedster, as well as the main web search engines.
As of this afternoon, Technorati shows brrreeeport to be among the top blog searches, trailing only Quickdraw McGraw (Dick Cheney) in popularity. 
It's an interesting assessment of how quickly the various engines pick up posts in the blogosphere.

Google and Bearing Point today announced a partnership, under which Bearing Point will launch an enterprise search practice, focused around bringing Google's search appliance to  the enterprise.
While the Google search appliance has been out for a couple of years, they have not made the inroads in enterprise search that they may have anticipated. 
This partnership reinforces the fact that enterprise search is different from web search.  The page rank algorithms that made Google so successful on the web don't easily translate to the enterprise.  Within a corporation or department, the value of a document does not correlate with its popularity.  If it did, the most important documents on an intranet would be the holiday schedule and cafeteria menu. 
In addition, much of the valuable content inside the enterprise is not stored in html files, but instead within databases, financial systems and document management systems.  A compelling search solution must fully integrate all this content, particularly in research-intensive industries like pharmaceutical or chemical companies.
These solutions require integration, not a plug and play server.  The BearingPoint partnership can provide Google with the professional services organization needed for these complex implementations.
The enterprise search market has been shifting in recent years with newcomers like FAST Search & Transfer, Endeca and others taking market share away from longtime leaders Verity, Autonomy and Convera.  Google has the name recognition, and now the professional services partner, to make a serious dent in this market.

A few weeks ago, Factiva launched the beta of its Search 2.0 interface. Search 2.0 is built upon the FAST Search & Transfer search engine and leverages Factiva’s taxonomies. Based upon my initial testing, Search 2.0 is an elegant and compelling solution for librarians and advanced researchers.

The basic interface of Search 2.0 presents results in a format familiar to novice and professional searchers.

At the top of the page are three tabs, separating your results by content type – Publications, Web News and Pictures. The bulk of the screen consists of your results, ordered by relevance, and including a keyword-in-context (KWIC) summary of each document.

Along the right column of the user’s screen is a new set of visualization and clustering features all under the heading of “Discovery Pane”. 

At the top of the Discovery Pane is an interactive distribution chart of the number of documents that meet your search criteria, by week.

Below the distribution chart is a section entitled "News Clusters", which provides a cloud view of noun- and verb-phrases which show up most frequently in the result set. 
Users of deli.cio.us will recognize the cloud format which makes it easy to navigate the terms which ar dominant within the results.

Below that are four distribution charts, each clustering the results based upon Companies, Industries, Subjects and Sources. Each bar of the distribution chart shows the number of documents that match, similar to how Endeca search results are presented. Results are updated dynamically as you click through various parameters.

Results of a search can be saved as an Alert by simply clicking an “Alert Me” button. Users can then specify the email address, format and frequency for alerts to be sent.

Summary:

Overall, Factiva Search 2.0 is a compelling interface for the researcher. When compared to the search engines of traditional aggregators, Search 2.0 is a breath of fresh air. Factiva’s behind-the-scenes tagging enables users to have a common interface for all of the Factiva content, so there’s no need to look up arcane search criteria (as compared to three binders of database-specific search guidance provided by Dialog). How many users will use the advanced features only time will tell. While navigating the Discovery Pane can dramatically improve relevancy, search engine studies consistently show that the average user types fewer than two words into a typical keyword search. Of course, Factiva’s user base is focused on knowledge workers and librarians, so their behavior may be different than the typical Google user.

I’d propose a few modest enhancements to the Discovery Pane. Largely for real estate purposes, each cluster includes the results of the top five matching results. In many cases, however, when I’m looking for that “needle in a haystack” document, it’s not the categories at the top that are most interesting, but rather those at the bottom. For example, to learn about the money laundering software industry, I typed in “money laundering” as my search term. The top five industries listed were banking, commercial banking, electricity/gas, electric power generation and crude oil. I am sure that computer software appears somewhere on that list, but there’s no way for me to drill down to find out. The ability to bring up all the matching industry categories would be a great enhancement. Similarly, the news cluster cloud today remains more intriguing than useful. In a large content collection (my “money laundering” search yielded more than 13,000 results), there are many phrases that might be of interest.  The news cluster cloud only showed me the first five results which were hardly meaningful.

The alerting features are clean and easy to use, and the daily or twice daily frequency lets me set up multiple alerts without it resulting in “alert overload”.

Factiva continues to be a forward-thinking organization and Search 2.0 shows it. Unlike their competitors who are held back by massive legacy systems, Factiva has the ability to integrate COTS software like FAST into its solutions. The visualization tools, while somewhat rudimentary, are an important step in providing its users with multiple ways to navigate its content. Search 2.0 is off to a good start and will surely continue to improve in the months to come.