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« April 2006 | Main | June 2006 »

May 31, 2006

What's in a word? Freemium

A couple of months ago, Fred Wilson blogged about his favorite business model, where web companies provide free use of their basic service, then offer premium versions and add-ons, available for a fee. As Fred pointed out, many successful companies have adopted this model (Skype, Flickr and Trillian, among others).  Fred closed his post asking if there was a name for this model, and if not, what might be a good name.

Alacra's Jarid Lukin proposed the name "Freemium".  And, from the looks of it, it seems to have stuck.

Tom Evslin used the term yesterday, in describing the Feedblitz business model.  Feedblitz is familiar to those of you who read Content Matters via email.  It takes my RSS feed and wraps it into an email and sends it to users who don't want to deal with RSS.  It performs its job admirably, while costing me nothing.  Under the Freemium model, Feedblitz charges for personalization of the emails and a frequency of more than once per day.
This week's issue of Wired Magazine also includes a reference to the Freemium model, in its article, Blogging for Dollars.

Freemium This chart, from Technorati, shows how the term Freemium has expanded throughout the blogosphere.  Its first appearance was in a March 23 follow-up post from Fred and was subject of a flurry of link love in the two weeks that followed.  Since then, it's appeared on blogs 223 times, and that doesn't include the mainstream press like Wired or other websites.

The Freemium model has been around for a while, but seems to be flourishing in the Web 2.0 world.  And, it's interesting to see the language spreading as virally as the applications themselves.


May 26, 2006

Keeping Ratings Trustworthy

Startsamazon Ratings and reviews, such as those offered by Amazon, TripAdvisor, Zagat and ePinions, are one the most compelling forms of user-generated content.  When done well, ratings provide readers with a way to make better purchase decisions in a time where unlimited choices create confusion.

But, what happens when the ratings cannot be trusted?

This week, the Dixie Chicks released a new CD, Taking the Long Way.  The Dixie Chicks, originally a  popular country band, caught the attention of many of us three years ago, just before the start of the Iraqi War, when they told a UK audience that “we’re ashamed that the President is from (our home state of) Texas”.  At that time, when questioning the administration was tantamount to active support of terrorists, they became immediate pariahs.  Country music stations refused to play their music and they received numerous death threats.

Dixie_chicks_cd Three years later, the Dixie Chicks have released their new CD.  The music style itself has changed.  Traditional country twang has been replaced with a more folk-pop sound, reminiscent of Roseanne Cash.  That, in itself, might result in some unusual ratings, as their traditional listeners might be disappointed, while listeners who might not have given them a listen in the past might find themselves fans.  But, what’s driving the Amazon ratings of this CD is less the music than the politics.  A one-star review on Amazon starts with “Lets get up and show your back side and talk trash, just to keep your self in the spot light, the CD sucks and I wouldn't buy it, I don't have anything by them and turn them off every time they come on the radio.”  Well, if you don’t listen, how can you review it?   

The Dixie Chicks are just the latest example of this.  Take a look at ratings for books from Al Franken or Ann Coulter.  I would guess that three-quarters of the reviewers have not read their books.  For those authors, five stars means “I love your viewpoint, even if I've never read this book”, while one star means “I hate your politics”.  Meanwhile, etailers have to contend with  suppliers trying to game the system, giving their own products and services high reviews, while bashing the competition.

What can be done to address this?  First, we can look at whether the “star system” is the best way to show ratings.  Sure, it’s easy for users to view the stars or sort by them, but statisticians have long known that “mean” is one of the weakest measurements.  A simple distribution of ratings might tell a better story.

Ratings_chart_1 Rating_chart_2 For example, let's look at the distribution of stars for two books that each have an average rating of 3.5 stars.  The green on, on the left, has most of its reviews giving it 3-4 stars.  The blue chart on the right has very little in the mid-range, but has a lot of 1-star and 5-star ratings.  By reading a few reviews, you’d get the context of why the love-hate relationship exists (is it the product, or something else).

Another option is to force users to provide their real names, or at least validate their registration by email.  This will reduce the number of fake or duplicate entries, although it may also reduce the overall participation level.

What ideas do you have for making ratings and reviews more trustworthy?  Please post your comments or your thoughts.

May 25, 2006

Yahoo, eBay Join Forces

Yahoo_logo_1 Ebay_logo USA Today broke the news that Yahoo and eBay have formed an advertising alliance.

The basics are that Yahoo will be the exclusive provider of third party display ads to eBay, while also committing to accept (eBay-owned) PayPal payments for Yahoo services.  With eBay as the 9th most visited site, Yahoo gains a huge number of additional page views to serve its ads to. 

One of the more interesting aspects of the announcement is the comment that the two companies intend to jointly explore “click-to-call” technologies on their respective websites.  Click-to-call technology has begun to take hold for certain buyers’ guides and directories, led by companies such as Ingenio and eStara.

Click-to-call technology can help close the loop between buyers and sellers, turning leads into transactions.  It will be interesting to see how these two leaders utilize click-to-call to offer new solutions to internet advertisers.

As I’ve indicated in the past, while Google gets most of the attention in the world of search, Yahoo’s diverse revenue base creates many more lucrative opportunities.  While Google’s growth is tied to the number of searches users do (and the ratio of searches to ad clicks), Yahoo’s model lets them monetize general Internet traffic more effectively.

UPDATE: Rafat Ali provides a summary of analyst feedback to the alliance.  All fairly bullish on the partnership.   Mark May of Needham  does a better job than I do of outlining  the strengths of Yahoo's diversified businesses: "We believe this deal also highlights YHOO strengths over GOOG and MSFT in certain important areas: 1) leading graphical advertising capabilities, to enhance EBAY’s revenue streams (MSFT is also strong, GOOG in development); 2) strong search market share, to enable EBAY to generate more traffic (GOOG strong; MSFT in development); and 3) a number of premium services and e-commerce properties, in order to power PayPal (GOOG and MSFT both lack scale here)."

On Data Mining, the NSA, Beer and Diapers

Categ4 Much of the debate the past week or two over the NSA data mining activities seems to be misdirected.

Critics of the program talk about how the Government should not be allowed to use data mining tools to monitor activities of the public.  Meanwhile, defenders of the program fall back on the old “if you don’t allow us to do this, you’re just helping the terrorists”.  Like many debates in Washington these days, this one is unlikely to result in meaningful results unless the focus is shifted.

Data mining is a technology that’s been around for more than two decades.  Ever since the early business intelligence software providers made the “beer and diapers” argument, companies have used data mining to understand customer behavior.  In fact, some of my favorite companies use data mining to improve my customer experience.  For example, Amazon uses data mining to recommend products to me, based upon past purchases. 

The law enforcement community has only recently begun to use data mining.  Sophisticated investigators use link analysis tools such as I2’s Analyst Notebook to help identify connections between people, places and activities.  During the past five years, the intelligence community has begun to explore use of data and text mining applications to improve their results.

In my view, use of data mining tools is a good thing.  Whether you’re a company trying to understand your customers, or a law enforcement agency trying to identify potential terrorists, leveraging technology to automate manual processes is a natural.  But, with these expanded capabilities come new responsibilities.  For corporate citizens, that means transparency.  I allow Amazon to use my purchase and browsing history to make suggestions because they publish their privacy policies and seem to live up to them.  If it were to come out that Amazon were not abiding by their privacy policies (perhaps selling my purchase history to other companies), they would lose the trust of customers and I, for one, would stop shopping there.

In the public sector, transparency is more difficult.  It’s hard to come out publicly and state that we intend to monitor phone traffic to see who’s calling whom.  That could certainly tip off the bad guys (though from everything I have read, the bad guys have long ago begun using internet calling and web tools like the anonymizer to mask their trail).  Rather than absolute transparency, I think that the government needs to demonstrate that it can be trusted.  And, that’s where the problems lie for this administration.  It has been the most secretive of any administration in my lifetime (more Nixonian than Nixon), reclassifying 50-year old documents that were in the public domain, using the courts to keep from disclosing the members of the Vice President’s energy task force and threatening criminal charges against the media.  It also has shown a willingness to violate privacy and national security for political purposes, most notably in the Valerie Plame affair.

I support use of data mining technologies to improve our intelligence.  But, the process requires oversight and, where feasible, transparency.

There’s a similar lesson in here for business.  Your customers will often be willing to share significant information with your company, provided that there are benefits to doing so (either to themselves or to the community as a whole) and that they trust you not to use that information for any other purpose.  Transparency and honesty remain the building blocks of successful information-based businesses.

Footnote: Beer and Diapers
For those unfamiliar with the beer and diapers story, it was the primary example used by sales reps from BI companies for many years.  The premise is that, by mining transaction logs, a convenience store was able to see that on Saturday nights after 10pm, there was a strong correlation between sales of diapers and beer.  In essence, families running out of diapers late on a Saturday night inevitably sent dad out to buy more, and he grabbed a six-pack to go.  In leveraging this information, the convenience store could decide whether to place beer next to diapers (to sell more beer to the diaper dads) or to place them further apart, requiring the dads to go through other aisles, perhaps adding a bag of chips to their purchase.  While the “beer and diapers” story is so oft-told (with many variations) that it has taken on the appearance of an urban legend, it’s origin seems to be based in a true study conducted by Teradata on behalf of Osco Drugs in 1992.

May 24, 2006

Taking @task to task

Knowledgestorm_logo I've given a lot of credit to KnowledgeStorm for the way that they've built their business.  And while I know they are not responsible for the content of their clients' white papers, I have to take them to task for one today.

Knowledgestorm_white_paper Having received an email from KnowledgeStorm focusing on white papers for Project Management, I chose to download one of them - a paper entitled "Project Management, Cool?" from software provider @task.  Now, I've read some pretty lame white papers over the years.  I'm used to seeing companies include unsubstantiated claims, repackage marketing collateral and worse under the label "white paper", but this one takes the cake.  The best way that I can describe it is that it seems that someone took a bumper sticker and expanded it to a few hundred words.

Here's a brief excerpt from this two-page white paper:
"Imagine if in the late 1870's when the first transcontinental railroad was being built if railroad project managers would have had enterprise software that could have managed the thousands of workers spread out across the country working on various parts of the construction; or if project managers had the ability to integrate operations with shipping to trigger real-time delivery of the enormous amounts of raw materials.
Now imagine if Henry Gantt, developer of the Gantt chart, would have had access to a powerful computer with broad-band Internet access to help the Navy manage ship construction during World War I."

Despite reading through the entire 2 page paper twice, I never found any details on the product itself, the underlying technology, the specific problems that it addresses or anything else that you'd expect to find in a technology white paper.
This is a white paper?  What were they thinking?

While I cannot hold KnowledgeStorm accountable for the contents of the white papers they disseminate, they are responsible for their own editorial.  And, highlighting this "white paper" as a recommended white paper for project management impacts their credibility as a trusted source of content.   

The 50 Content Companies that Matter: Craigslist

Craigslist When you look at the disruptive Internet companies, those that have changed the way that people do business, the first ones that jump to mind are giants like eBay, Google, Yahoo, Monster and Travelocity.  These companies are all generating huge revenues and have transformed their industries.

But one of the most disruptive Internet companies of the past few years is one whose revenues are barely a fraction of those:  Craigslist.  In just a few short years, Craigslist has dramatically changed the way that people buy local products and services, find jobs, apartments or even dates, despite revenues estimated in the low eight figures.

Not long ago, classified advertising was the cash cow of the newspaper industry.  Whether you were looking for a job, an apartment or a used car, the newspaper was the first place most would turn.  When’s the last time you turned to a newspaper classified for anything? 

While it’s hard to pull out classified revenues from newspaper financials, one San Francisco Chronicle survey done in late 2004 estimated that Craigslist had cost Bay Area newspapers more than $50M per year in recruitment ads alone.  Nationally, the impact today must be in the billion-dollar range.

Craig_newmark Craigslist started as an email list in 1995 by developer Craig Newmark, who shared the list among his friends in the Bay Area.  That grew virally, and today, Craigslist offers local listings in 190 cities in 35 countries around the globe, with more to come.  Craigslist serves up more than 4 billion page views per month, making it the 7th most visited English language site in the world.  It receives more than 9 million classified ads and 400,000 job listings each month.  Yet the Company employs only 22 people.

Today, whether you’re looking to hire an intern, buy a used car, rent an apartment or find an 80 year-old victrola, the first place you will look is probably Craigslist.

Initially, all the listings on Craigslist were free.  Even now, Craigslist charges only for certain categories like recruitment ads, and then only a modest fee to discourage spamming the list.  While Craigslist operates as a for-profit company, they clearly are leaving a lot of revenue on the table.  That comes from the philosophy of founder Craig Newmark, who preaches restoring a human voice to the Internet and providing an alternative to big media.

If Craiglist were to begin charging for more of their classifieds, they could easily turn into a $300-500 million company practically overnight.  In the meantime, they have developed a loyal customer base of 10 million users.  Having completely transformed the $20 Billion classifieds business, Craigslist is clearly one of the 50 Content Companies that Matter.

May 22, 2006

Waxxi - First Interactive Podcast

Waxxi_logo_1 A few weeks ago, I posted about Waxxi, a startup offering interactive podcasts.

Their first such podcast was held live this past Saturday and featured Robert Scoble and Shel Israel.  Unfortunately, due to scheduling conflicts, I couldn't participate.

The initial reviews were pretty positive, though.  Jeremiah Owyang has a very detailed summary of the podcast content on his blog, while Frank Gruber gives a thumbs up to the process itself. 

I think Waxxi has hit on an interesting format for encouraging dialog within a community.  I will be sure to sign up for their next one and would be interested in hearing from readers who are considering using Waxxi for their own use.

UPDATE: Waxxi has posted the podcast to their site.  You can download a copy or listen interactively on the site.

May 18, 2006

TechTarget acquires 2020Software

2020logo_1 Rafat Ali is reporting that TechTarget has acquired 2020software.  2020 is a software comparison and demo site, primarily targeting the SMB market.

This acquisition would complement TechTarget's current offerings, with BitPipe focused on the higher end, and 2020 for smaller businesses.

According to VentureWire, via Rafat, TechTarget paid in the "eight figure range".  VentureWire also adds that TechTarget CEO Greg Strakosch said that they would likely file for an IPO within the year.

The lead generation market continues to be a hotbed of activity, with KnowledgeStorm and TechTarget vying for the IT market.  I would anticipate seeing rollups among lead gen companies in other market segments as well.

Summer Intern Needed at Alacra

AlacralogosmallAlacra is currently seeking a graduate or undergraduate summer intern.

The intern will be involved in several projects, including the development of a vertical wiki.
Applicants should have strong research and web skills and have an interest in content development.  This is a paid (stipend) internship.

If interested, please contact [email protected] for more details.

Google Notebook - Test Drive

Google_notebook_logo
Now that Google Notebook is live, I thought I'd take it for a quick spin.

My initial feedback: it's rather underwhelming.

Google Notebook is designed as a bookmarking replacement - in essence it's Google's response to delicious, which of course was acquired by Yahoo last December.  Like Delicious, Google Notebook allows the user to select web pages, annotate them and store them for retrieval at a later time.  Also, like Delicious, Google Notebook can be private or shared with others.

Google_notebook_plugin Google notebook is a browser plugin.  From any web page you can simply right-click, then select "note this" to create an entry for that page.  From there, you simply type in your comments about that page.

True to its name, Google Notebook uses a notebook metaphor (the kind you write in, not the kind you type into) for storing these annotated sites.

Unlike Delicious, Google Notebook does not use tags.  Rather than assigning tags to the pages, you enter text about them, then you can create section headings for various topics, and organize the notes into the sections.

One benefit is that if you highlight text passages, Google Notebook will automatically grab them and paste them into your note.  This makes it more of a researcher help than strictly a bookmarking tool.  In that sense, one might look at Google Notebook as a competitor to NetSnippets rather than Delicious.

Google_notebook_full_screen Here, in full screen mode, you can see how the notebook page looks.
The interface is clean (as you'd expect from Google) and they've got a nice ajax-based drag and drop capability to move your notes around.  The page is search-driven, so you can search your own notebooks or public notebooks for whatever you're seeking.

As with most Google Labs offerings, Google Notebook at first blush is uninspiring.  While it's a potentially useful research assistant, the lack of tagging limits its usefulness from a social software perspective.  True annotation seems to be a very niche product and it would seem that Google would much prefer to go after the wide audience that Delicious has established.  Perhaps it will get there in the next phase, as it seems pretty easy to add tags to what they've already delivered.  In the meantime, Google Notebook is a simple offering that users might find useful but is unlikely to inspire  raving fans the way Delicious has.

For more feedback on Google Notebook, take a look at TechCrunch, SearchEngineWatch and GoogleTutor.




Yahoo Analyst Day

Yahoo_logo Yesterday was Analyst Day for Yahoo.  They have posted the PowerPoint (188 pages worth) on the Yahoo website.  It's a lot to go through, but has some interesting slides.

Yahoo_fuse_1 Jeff Weiner, SVP of Yahoo! Search and MarketPlace, did an interesting presentation on their view of SocialSearch.  Yahoo's vision uses the acronym FUSE - for Find, Use, Share, Expand, as shown in this diagram.

Yahoo_social_monetization Yahoo! really seems to have thought through their strategy, leveraging Social Search (Yahoo Answers and Yahoo Groups),  social bookmarking (delicious) and social media (Flickr and a tbd video service) to drive revenue.  The revenue model is shown in the graphic below.  I think this vision is a real differentiator from Google, whose initial efforts (like Google Notebook) have been uninspired.


For more commentary on Yahoo! Analyst Day, check out Rafat Ali on how Yahoo is trying to catch up to Google in revenue per search, or take a look at ...not much else.  Surprisingly, Yahoo Analyst Day got hardly any coverage on the main search engine and tech blogs, compared to pretty extensive coverage of Google Press Day.

Update: John Battelle has added a few brief thoughts and will be interviewing Jeff Weiner tomorrow.

May 17, 2006

Social software solutions to knowledge management problems

Since the mid-90’s, KM companies have been trying to solve the “expert finder” problem, that is, finding the experts within your organization for a given topic or problem. 

While finding the internal expert is critical for all large companies, it’s most acute at large consulting firms and investment banks.

There have been various KM attempts to solve this problem, some simply using resumes (have skills and experience, but never get updated), while others tried to get users to update proprietary databases with skills and interests, generally with low participation rates.

Rod Boothby, at E&Y, posts about how they are using people blogs to capture and maintain the critical information about skills and projects, to quickly find the experts for a project team.

This is another example of how inexpensive and easy-to-use hosted social software applications are solving KM problems where larger, more complex applications failed.  The ease of creating blog pages (in this case, using templates for consistency), of linking project pages to people pages, and using standard web search tools, encourages adoption and makes maintenance easy.

May 16, 2006

The 50 Content Companies that Matter: TripAdvisor

Trip_advisor_logo Since the early days of the Web, travel has been one of the fastest growing segments on the Internet.  So much so that it has changed the business model of the airlines and nearly decimated the travel agent industry.

While much of the attention has been on the transactional sites that book travel, there have been many other pockets of innovation in this space.  One of the most innovative has been TripAdvisor, a subsidiary of Expedia which was spun off last year from Interactive Corp (IAC).  Expedia itself has always been a technology leader, perhaps due to its origins within Microsoft.  TripAdvisor was acquired by IAC/Interactive (which then owned Expedia) in the spring of 2004, and is a lead generation site for the travel industry. 

TripAdvisor brings together two of my favorite themes in the content industry – lead generation and reviews and ratings.  TripAdvisor provides users with travel information and recommendations for hotel accommodations, restaurants and activities on various destinations.  The most valuable part of the TripAdvisor content are the ratings.  I find their hotel ratings invaluable as a means of finding quality hotels at a reasonable price.

Tripadvisor_inside_palo_alto TripAdvisor has recently taken another step up the user-generated content chain, launching wiki-based content branded as TripAdvisor Inside.  These special content sections, each focused on a city or state (see example for Inside Palo Alto), are collaborative, user-created editorial pages with sections for history, things to do, dining scene and more.  With its recent launch, the content right now is a bit sparse (only nine restaurants in Palo Alto) but that’s sure to grow in time.

 

Just last week, TripAdvisor launched what they call goLists, where users can contribute lists of places to go, things to see, sample itineraries, etc.  Similar in concept to an Amazon Favorites List, this is another example of leveraging the community to create valuable content.

TripAdvisor has done a terrific job in building valuable content, which in turn generates significant leads for their travel partners.  Their star ratings and reviews have created a barrier to entry for new competitors, and their new wiki pages show that they understand how to leverage their community to develop more compelling content.  In creating a balance that addresses the needs of their advertisers and users, while continuing to embrace new technologies, TripAdvisor is clearly one of the 50 Content Companies that Matter.

May 13, 2006

Can You Spell D-O-P-E-S?

Us_capitol CNET's Declan McCullagh broke the story that Rep. Michael Fitzpatrick (R-PA) has introduced a bill that would ban access to social networking sites (and virtually any other site where users contribute content) in public access locations such as libraries and schools. 

The bill, called DOPA for the Deleting Online Predators Act, has been endorsed by House Speaker Hastert.  McCullagh has posted a copy of the bill here.  The bill is clearly in response to alarmist stories on the news about predators targeting MySpace, Facebook and other social networking sites to identify and engage potential targets.  The definition of social networking is quite broad: "...commercially operated Internet website that allows users to create web pages or profiles that provide information about themselves and are available to other users and offers a mechanism of communication with other users, such as a forum, chat room, e-mail, or instant messenger."  The way I read that, it could ban users from reading blogs that allowed comments, or even Flickr or Wikipedia.

While I am not surprised at this knee jerk reaction, it's just disappointing to see Congress jump into things that they clearly do not have an understanding of.  You don't protect children from online predators by reducing their access to the Internet any more than you would protect them from offline predators by banning children from parks and schools.

If the United States is to remain competitive economically, it's critical that we, as a society, embrace technology.  While the Government challenges the science of Global Warming and Evolution, the one bright area for the U.S. in the sciences has been our continued innovation in the technology field.  Between this DOPA bill and the COPE Act - telecom/cable efforts to charge a premium for Internet access, Congress is on the verge of mucking up the entrepreneurial innovation engine of the Internet.

I would like to propose a new Act; I call it No Congressmen Left Behind.  It would require all members of Congress and their staffs to demonstrate proficiency in the basics of the Internet before they would be allowed to vote on any issue that impacts its use.  I urge you to contact your Representatives and tell them to oppose both COPE and DOPA.

In the meantime, if you have children, take a few minutes to look at their MySpace page.  Ask them to show you their FaceBook listing.  Have a mature and intelligent dialog with them about the risks of sharing too much information on the Internet.  Help them understand the boundaries.  MySpace and FaceBook are not the problem.  And ignorance is clearly not the solution.

May 11, 2006

Google Co-op - Update

Google_logoDanny Sullivan has an in-depth overview and analysis of Google Co-op at his Search Engine Watch blog.

Danny describes it as Rollyo-like vertical search, combined with tagging (or, as Google calls it, labels).  Users can "label" pages into various topics.  Unlike end-user tagging with delicious, Google labels are geared towards publishers (or other vertical market developers) wishing to tag or categorize large numbers of pages into a predefined taxonomy.  This process will be similar to what content providers have done for years using manual tagging or automated categorization software.  The taxonomies can be hierarchical, with labels and sublabels.

It will be interesting to see how this pans out.  One reason that categorization has succeeded for large content providers but has often failed inside the enterprise is that it takes a fairly rigorous editorial process to apply consistent tags to content.  Google has always emphasized the machine's ability to make information navigable through algorithms.  This approach, bringing editorial decision making into the process, is sure to lead to some compelling discussion.

Jotspot acquired by Yahoo?

Jotspot_logoTechCrunch is reporting a rumor that Yahoo has acquired ASP wiki provider JotSpot. 

Jot_alacra_wiki We've been using JotSpot at Alacra for a few months.  Similar to WetPaint and SocialText, Jotspot has positioned the hosted wiki as the web 2.0 version of Knowledge Management.
With Yahoo potentially getting into the mix, wikis could quickly proliferate into mainstream use, which would help players like SocialText who are better suited to the enterprise.

This is still just a rumor, as TechCrunch comments indicate current Jot employees were not aware of any acquisition.


The 50 Content Companies that Matter: Topix

Topix_logo There are many news aggregators in the market today.  Most of them add value to the news content by tagging and organizing it for their markets.  While most have adopted some level of automation, they still rely heavily on editorial expertise to ensure accuracy.

Topix.net is a news aggregator which relies solely on automated indexing to create a comprehensive taxonomy to drive relevancy.  Founded in 2002 with a mission of helping users quickly and easily find targeted news on the Internet, Topix.net today categorizes news from more than 10,000 sources into over 300,000 specific topics in near real-time.

Rich_skrenta The founders at Topix.net came out of the Netscape-driven Open Directory Project, an editorially-driven project to categorize sites on the Internet.  According to co-founder and CEO Rich Skrenta, their experience with tends of thousands of volunteer editors made him “decide to avoid editors in Topix.net and stick to algorithms”.

Early on, one of their key issues was resolving how to serve relevant contextual advertising on a news site.  While Google AdSense typically serves relevant advertising to static web pages, the results for news were less relevant and often embarrassing.  In one of the more notorious examples, the New York Post published an article about a murder where the victim’s body parts were found in a suitcase.  Adjacent to the article was an AdSense ad touting luggage (for those "do-it yourself-ers", I guess).

To combat that, the technology team at Topix.net developed a set of algorithms and a knowledgebase that could better understand what a news story was about and serve up more relevant ads.  The knowledgebase is focused on key topical areas, such as geographical map data, lists of movies, CDs and entertainers, and more.  The Topix.net algorithms leverage the information in the knowledgebase to classify each news article to the correct topic.

Today, Topix.net gets more than 3 million unique visitors per month.  They estimate that to be about half of their readership, as 50% comes through the sites of partners AOL, Yahoo, CitySearch, Ask.com and others.  Topix revenue is largely driven through serving AdSense ads on their pages.

Last year, 75% of Topix.net was purchased by Gannett, Tribune and Knight-Ridder (now McClatchy).  That investment assigned a healthy valuation of $64M to Topix.net; not bad for a company with estimated revenues of $1M.

Just last week, Topix.net announced the launch of its publisher platform, a revenue-share model targeted towards small-to-medium news providers.  They are also extending the invitation to bloggers a la Pluck's Blogburst.

Topix.net has done an amazing job of leveraging technology and domain expertise to create a fully automated system for categorizing news and serving relevant ads.  Publishers often view editorial’s role in categorization as simply checking or verifying automated results.  Topix.net has demonstrated that a more effective use of this domain knowledge is to use it in the development of a knowledge base and set of algorithms that can automate the labor-intensive tasks.  And for that, they are clearly one of the 50 Content Companies that Matter.

May 10, 2006

Notes from Google Media Day

Google_labs_1 At Google Press Day, Google announced four new products.

Google_trends Google Trends is a new visualization application that creates a trend map comparing searches and mentions of various terms over time.  Google Trends builds on Google Zeitgeist to give you a sense of what users have been searching.  It could be very useful for developing SEM strategies.

Google Co-op is a beta of an application that will allow content providers to tag/annotate web pages.  This metadata can be used by users who "subscribe" to that content.  One example Google provides would be that "a doctor can label web pages related to arthritis, and users who subscribe to that doctor's information will receive options at the top of the results for more specific information such as "treatment," "symptoms," or "for health professionals" when they enter a relevant query."  Google Co-op is supposed to be available at google.com/coop, but right now that page doesn't produce any results.  According to Philipp Lenssen, the widely rumored Google Health might be tied in to Google Co-op.

From the sound of it, Google Coop could be a Rollyo-like application, enabling you to create custom, vertical searches, but with the addition of tagging as well.  Until the info from Google becomes a bit more clear, it's hard to tell how they envision it being used.

Google also announced version 4 of Google Desktop.  This version adds Google Gadgets, along with an API for development of new gadgets.  Initial gadgets include things like clocks, weather maps and games.

Announced, though not available until next week is Google Notebook.  Google Notebook is an online notebook where users can paste text, images or links from sites they are visiting into a personal notebook.  The notebook can be shared with other users.  Beginning next week, it will be available at http://www.google.com/notebook.

For more details and insights from Google Media Day, read:
Philipp Lensen's  Google Blogoscoped
Steve Rubel's Micropersuasion
Nicholas Carr's Rough Type
Matt Cutts' blog
GoogleRumors
eWeek blog
Official Google press release is here



May 09, 2006

The Future of Magazines

Flipping through the May issue of a trade pub for the content industry, I landed on the “executive changes” page.  My reaction, after glancing at the first few was “that’s ancient news”.  These were based upon press releases that went out two months earlier.

It made me give some thought to the role of magazines in today’s media framework.  I understand the editorial and production cycles of a monthly magazine, but I think that it’s important that publishers adapt their editorial content to what is relevant for a monthly cycle.  If you’re publishing monthly (or even weekly), your mission should be analysis and context, not news delivery.

With direct-to-consumer press releases, readers don’t depend upon monthly trade rags for news; instead, they want perspective and insights.

Many suggest that magazines are dying as a medium.  I disagree.  Magazines still have appeal, but the context in which they are read has changed.  Their format makes them easy to slip into your briefcase for a train or plane ride.  For certain consumer magazines, the ability to archive a collection has appeal.  Magazines like the Economist or the New Yorker leverage their form to provide in-depth articles on a specific topic.  (When’s the last time you read a 20-page article online?)

But many of today’s trade publications run the risk of becoming irrelevant, as a new generation of users turns to other sources for the information traditionally within the trade publication domain.  In order to remain significant, trade pubs need to put the needs of their users first.

Those willing to rethink their role will realize that they have many strengths which they can leverage.  The greatest strength is their community of readers and advertisers.  For most magazines, their online presence is simply an extension of the offline edition, perhaps updated with greater frequency.  Rather than simply duplicating the content of the print version, magazines should begin to take advantage of the many web 2.0 tools out there to develop their community, for example using wikis and blogs focused on special topics.  New applications such as interactive podcaster Waxxi could be used for participatory events.

Returning to the “executive changes” section, magazines could take advantage of their breadth of coverage to show trends in the changes (who’s hiring and who’s losing talent) providing rankings or tables, rather than simply reprinting old press releases and labeling it news.

Trade publications have the brand, reach and subscriber base today to enable them to create strong communities which would, in turn, allow those brands to thrive for years to come.  Those strong brands would continue to command top dollar from advertisers looking to reach that community.  Those who insist on keeping to the editorial calendars of the past will find their impact and their brands diminishing.

Alacra seeks top performing sales executive

Alacra is looking for an experienced Sales Executive.

The position combines managing an existing territory of financial institutions and professional service firms and new business development.  Working with a dedicated Account Manager in a team approach, you will jointly introduce new products and services, renew existing agreements, negotiate contracts, prospect for new business and prepare all meeting materials.  Alacra is a rapidly growing information services company headquartered in lower Manhattan. 

If you're aggressive, have a proven track record as a top quartile performer and relationships in banking and professional services, send an email to [email protected].

May 08, 2006

Waxxi - Social Podcasting

Waxxi_logo There’s a lot of experimentation going on right now, applying a “social spin” to new and existing technologies to generate new uses.  Frank Gruber has an interesting post on a new company, Waxxi, which is launching an interactive podcasting capability. 

The basic concept is that Waxxi will host a scheduled interactive podcasting event, where participants can call in and participate.  The audio portion will be augmented by an IM stream as well.

Waxxi’s first interactive podcast will occur May 20, 2006 at 10:30 am PST / 1:30 EST.  The podcast will feature Robert Scoble (Microsoft’s best known blogger) and consultant Shel Israel, co-authors of the business blogging book Naked Conversations.  You can register for the podcast at the Waxxi site.

As Michael Arrington points out, there could be a few hiccups in this podcast, depending upon the number of participants and the level and methods of moderation.

That being said, this could be an interesting vehicle for content providers and conference companies.  Today’s webinars tend to be uni-directional – just a talking head clicking through PowerPoint slides.  If you can leverage your community of users to create an interactive dialog, that could be very compelling.  And, since the end results are captured as a podcast, you can develop a collection of interesting audio content for your users.

May 07, 2006

Share your OPML

Share_your_opml Dave Winer has launched a new application called Share Your OPML.
The OPML file is the file that stores the RSS feeds that you read. 

Share Your OPML is sort of like a Last.fm for RSS feeds.  The goal is to compile a database of what people are reading, as well as the patterns within the individual taxonomies, then use pattern matching to suggest other feeds.  Like Last.fm, you can easily see other users who have similar interests to yours - just click on the "Subscriptions Like Mine" link.

There's also a top 100 ranking (right now, TechCrunch is #1 by a fairly wide margin).  Share Your OPML is built under a Creative Commons license, so you can expect others to build onto the framework with new functionality.

To participate, just upload your OPML file.  Most RSS feedreaders have a menu item that lets you export your OPML file with a single click.  So, take a minute, upload your file and discover some new and interesting feeds.


May 06, 2006

Google Health: Updated

Google_health From the team at Digg and via Steve Rubel, you can preview a look at Google Health here.

Notice the refine results options, focused on health-related topics in their taxonomy.

May 05, 2006

Social software adoption patterns

Steve Goldstein has an interesting post today on the AlacraBlog: You Are What You Publish.
In it, he postulates how students, being early adopters of tools like MySpace and FaceBook, will soon utilize other social networking apps such as wetpaint, jotspot or Socialtext. 
These students, as they move into the workforce will drive increasing usage of community-based social sofware in the workplace.
I echo Steve's conclusion that if you're looking for ways to spur viral adoption of these tools, the education market is a good place to focus. 
Meanwhile, if you have kids today, take a few minutes to learn more about what they're doing on these social software sites.  It might just help you understand where your own business will be headed in the next few years.

Google to launch vertical search for health market?

According to USA Today's Kevin Maney, Google may be set to announce a new service, Google Health, next Wednesday at the annual Google Press Day.

Google Health would be a vertical search engine covering the healthcare industry.  It would make a lot of sense.  After Finance (and sex, of course), health information is among the most frequently searched for information on the web.

Vertical search is certainly a concept whose time has come.  While users can try to use tagging and technology to try to filter and organize results, searching a predefined set of sites is a clean way to ensure you get the results you need.  For information such as health care data, limiting the sites to those from "trusted sources" can be even more critical.

It will be interesting to see how Google Health compares to editorially-driven sites focused on aggregating health care.  Sites such as WebMD, Healthline and other publishers are compelling and offer community as well as information.  It will be interesting to see how Google develops an appealing solution for consumer healthcare information.

May 02, 2006

Net Neutrality

The Times and many other outlets had interesting articles this morning on Net Neutrality aka efforts to thwart AT&T and other carriers and ISPs from trying to change the Internet playing field.
But, none say it better than Fred Wilson in his post today: A VC: I Am Pro Choice.
It's scary to think that the same Congress who thought the solution to all of our energy dependency woes was a $100 voter payoff will now be assessing a complex issue such as this.  Hopefully, Google, Microsoft, and all the other companies who have their livelihood at risk will weigh in and shut this ridiculous effort down.

In the meantime, take a minute and contact your Senators and Representatives and tell them to support Byron Dorgan and Olympia Snowe's net neutrality bill.

Nstein raises $10M (Cdn)

Nstein_logo Tagging technology provider Nstein announced today that they had raised an additional $10M ($Cdn) in debt financing.

While this will, no doubt, provide another year or two of life support for Nstein, for me it reaffirms my disappointment that the semantic tagging sector still has yet to take hold.  Nstein announced revenues of $9M Canadian, with a net loss of ($6.7M) Cdn and an EBITDA loss of ($3.1M) Cdn.  Reviewing Nstein's press releases for the past 6 months, only one was related to a sale; the others were simply marketing hype or biz dev deals with no customer involved. 

More than five years after they burst onto the scene, the major players in the tagging and text analytics market have been unable to gain a strong foothold.  Together, Inxight, ClearForest and Nstein have revenues of less than $30M and none are near profitable.  And these three are among the survivors.  Numerous other companies including Lexiquest, WhizBang! Labs and Lingomotors went belly up or were acquired at bargain basement prices.

Despite all the hype, the past five years have shown these technologies remain niche tools with their primary success in the publishing market (semi-automating manual tagging) and federal government (intelligence).  Early adopters in the pharmaceutical, manufacturing and other markets have found the technology too complex with too limited an ROI.

I believe there is still an opportunity for this technology to take hold.  However, none of the companies has the size nor stature to make it happen.  While some larger players have gotten involved in this space (IBM, SAS, SPSS and others), they view unstructured data as tangential and their sales force will not focus on it.  I think the necessary step towards success would be a roll-up of the remaining big three (Inxight, ClearForest and, perhaps, Nstein or Attensity).  A $30M company with focused management could establish a presence in one or two key markets.  Instead, today each Company ends up chasing too few sales opportunities and takes on projects which they are ill-suited for, just because it's too hard to say no to revenue at their current size.

Semantic tagging and text analytics still holds much promise.  Hopefully, these companies will make the needed strategic decisions before they all run out of cash.

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