Content Matters

I've refrained from posting about the Google-YouTube marriage, knowing that thousands of bloggers and media, most (all?) much smarter than I, were covering it like FoxNews covered the Natalie Holloway story.

That said, I'm surprised that the debate continues as to whether Google overpaid.

The basic premise seems to be that valuations of web 2.0 sites were getting astronomical and that the acquirers could never achieve a return on their investment.  I'd buy that argument if it were a traditional media company buying it, but it doesn't hold water in this case.  There are three reasons why Google was uniquely well-suited to make this acquisition:

1. Google is spending about 2% of its already frothy market cap to buy this with stock. That's different from when News Corp spent $580M in cash to buy MySpace (which, by the way, seems to be working quite well for them).  Google knows better than almost anyone how to monetize the YouTube traffic, so giving up 2% of its shares for the million or so unique daily visitors to YouTube looks pretty good.  And while uniques are important, a key metric is the amount of time spent on a site, and YouTube will dramatically increase the average time spent per user.
2. The biggest argument against the acquisition, as highlighted by Mark Cuban's Blog Maverick, is that lawsuits will bog the company down and, if copyrighted content were removed, there'd be little left of value.  Fair enough.  But, Google's gained quite a bit of experience in negotiating with the publishing community and I think they'll get most of the companies to play ball.  After all, while some overprotective companies like Disney might sue, others like Viacom's Comedy Channel know that the value of having a 3-minute clip from the Daily Show is incredibly valuable free advertising.
3. The other challenge with YouTube is that delivering all that rich media content takes a lot of servers and bandwidth.  There aren't many companies that understand web infrastructure better than Google, so I doubt they'll have many challenges in this area.

Yes, there are many reasons why a traditional media company might have been afraid of the risks involved in acquiring a property like YouTube.  But for Google, it seems like a no-brainer.

The second day of InfoCommerce seemed more lively and more relevant (at least to me).

Andy Goodenough led with the keynote, talking about how they'd built Highline Media to a $50M business in just over three years through a combination of acquisition and organic growth.  It was interesting to note that Highline's data division, largely a byproduct of its editorial focus, will exceed $10M in revenues in 2006.

My vertical search panel followed, with presentations from Shannon Holman of ALM, Han Huang of FindGuru and DeSilva & Phillips Partner Jeff Dearth.  We covered a lot of ground in an hour, showing examples of successful vertical search as a core (ad supported) product, as a value-add to subscription products and as a means of driving premium content sales.

One of the most interesting panels of the Conference was the Inferential Data panel, with presentations from Planalytics, MedMeme and Kelley Blue Book.  Scott Bernhardt, SVP of Sales & Marketing for Planalytics walked us through a fascinating presentation of their weather-based business intelligence applications.  Basically, they overlay weather data on a set of proprietary models to generate forecasts for retailers.  For example, we had a cold and wet September, which translates to an improved market for rainwear, sweaters, soup and cough medicine and a down market for lawn & garden products and barbecue charcoal.  In other words, they projected a good month for Kohl's (who later reported a 16% boost year-over-year in same store sales) and a poor one for Home Depot (who are yet to report their September numbers).  I'd not seen Planalytics before and was very impressed with their offering.

Renny Ponvert, who is stepping down as President of Hemscott following its acquisition by i-Deal, led an interesting presentation on "Who's Winning and Why".  Renny, a veteran of the financial information business, got everyone's attention by describing the defensive position many publishers take: "Insecurity, masked by cannibalization concerns creates a low-growth, slow death spiral", exemplified by the newspaper industry.  On the positive side, Renny identified three tactics that content provider can use to their benefit: Visualization (examples were NY Times bubble charts and CNET Heat Maps), the use of crawl technology to scale your content business and the utilization of vertical search to reduce noise and improve the depth of your site.

InfoCommerce is a somewhat quirky conference.  Of the content industry events, it probably has the largest percentage of old media including a handful of ostrich-like directory publishers.  That said, there are always some interesting models from companies that otherwise don't show up on the radar.  This year, for me, those included Planalytics, Healthline Networks and Health Market Science.  Russell Perkins, who runs the event in conjunction with Roxanne Christensen and Megan St. John, has successfully transitioned the focus from traditional directories to now include vertical search, the inferential data companies mentioned above, b2b lead generation and other data-driven content businesses.

On Wednesday evening, InfoCommerce held a dinner where they presented their "Model of Excellence Awards" to about eight products.  Alacra was honored to receive an award for its Alacra Compliance application.

If you haven't been to an InfoCommerce event recently, I'd recommend you put it on your calendar for next fall.

The theme of this year's InfoCommerce Conference is "Becoming One With Your Market". 
The first day included presentations from a mix of old and new database publishers.  The morning kicked off with a keynote by Jim Burke, CMO of D&B.  Jim spoke of efforts to turn around this 165-year old business.  D&B has historically been, at best, indifferent to their customer needs.  They are now attempting to reshape themselves with their stated aspiration "to be the most trusted source of commercial insight so our customers can decide with confidence."  Jim points to some successes, but based upon customer experiences, I think they still have an awfully long way to go.

Dean Stephens, CEO of Healthline Networks, gave an overview of their vertical search engine for the healthcare industry, launched last fall.  Healthline today sees about 3 million unique visitors per month, making it among the fastest growing websites.  Healthline is a great example of how domain expertise can be applied to improve search.  They have developed an extensive semantic taxonomy, linking diseases, symptoms and treatments, layering a visualization application ("healthmap") on top of the results.

The day wrapped up with presentations from a few startups in the information industry, featuring Dan Savage of b2b search engine TradeComet, Frank Vaculin of social networking site Spoke Software and Shoshanna Zilberberg-Winter, newly hired CMO of ShopWiki.  ShopWiki, founded by former Doubleclick leader Kevin Ryan and others from the Doubleclick team, is a compelling search engine for shopping.  The search engine itself is pretty compelling, offering natural language search and color-based search ("red luggage").  On top of that are community-based shopping guides (hence the wiki in the name) and user-submitted videos. 

Today's session includes a keynote by Highline Media's Andy Goodenough.  I'll be moderating a vertical search panel that follows, featuring ALM's Shannon Holman, Han Huang of FindGuru and Jeff Dearth of DeSilva & Phillips.

This week, I'm at the InfoCommerce Conference at Penn's Landing in Philadelphia.  The InfoCommerce Group focuses largely on database publishing

Penn's Landing,
originally uploaded by rleigh.

The conference kicks off this morning with a keynote by D&B Chief Marketing Officer Jim Burke.  Other morning sessions include a discussion among three InfoCommerce "Model of Excellence" winners from Guidestar, Healthline and Buyerzone and a focus on workflow applications, with speakers from Congressional Quarterly, PubEasy, CVM Solutions and Health Market Science.

The pre-conference activities kicked off last night with a lovely dinner at photographic gallery The Print Center.  It didn't take much discussion before realizing that there was no more than 2-3 degrees of separation among any two attendees in this small database publishing community.

I'll post periodically with highlights from the Conference.

While the blogosphere continues to resonate with comments on Google's acquisition of YouTube, Google quietly yesterday released Google Docs & Spreadsheets.

Google Docs & Spreadsheets is a (very) lightly integrated version of Google Spreadsheets plus Google Word Processing (past acquisition Writely).  In playing with the app, it looks like there's no real integration yet between the two applications; for example, you can't imbed a spreadsheet into a document.  The "integration" is merely placing the two application in a single location with a common UI and shared tools like file lists.  There's also some integration with email, as files emailed to the email account registered with Google docs automatically appear in the file list.

It's apparent that Google pushed this release to be timed with this week's Office 2.0 conference in San Francisco, hence the light integration. 

That being said, it's clear that Google intends to create an Office-like suite that, in time may have an impact on Microsoft.  Google's model of putting betas out there then enhancing them over time, suggests that the combination of Writely, Spreadsheets and Calendar has the potential to gain traction.

Google Docs is unlikely to gain adoption in the enterprise.  Security-conscious companies are not about to entrust critical documents and spreadsheets to Google.  There are a number of markets where a free hosted office suite could take hold, particularly the education market.  The collaborative features, while modest today, could also drive adoption in niche markets over time. 

For more on Google Docs, take a look at Michael Arrington's comments, Inside Google and CNET.

 

The list of visionaries who truly understand the value of content in the web environment is pretty short.  The list of those who apply that knowledge in their core business is even shorter.  Near the top of that list is Tim O'Reilly, founder and CEO of O'Reilly Media.

O'Reilly is best known for their books.  Look on the bookshelf of any developer or IT professional, and you're sure to see a bunch of O'Reilly books -they're the ones with the sketches of animals on the cover.  In fact, many users know them by their animals - ask any Perl programmer for their copy of the "Camel Book" and they'll know you're referring to O'Reilly's Programming Perl.

So, what makes this book publisher a visionary?

To start, O'Reilly published its first  book on the web, the "Whole Internet User's Guide and Catalog" in 1992.  At the time, there were fewer than 200 websites out there.  O'Reilly launched the Global Network Navigator ("GNN"), later sold to AOL, in 1993 - the first portal and first  advertising supported website.

More recently, O'Reilly has been credited with naming "Web 2.0" and hosts an annual Web 2.0 conference.  But where O'Reilly really shows its merit is in its online versions of its products.  O'Reilly, in conjunction with Pearson and with technology from Bureau van Dijk, launched Safari Books Online in 2001.  Safari Books is a subscription service where users can rent a bookshelf where they can access a set number of books online from among the more than 3,000 in the library.  Just recently, O'Reilly has launched a new "bookshelf-free" version called Safari Library, where users can access an unlimited number of books for $39.99 per month.

O'Reilly has added SafariU, where they allow educators to compile custom textbooks from individual chapters of books in the O'Reilly library.

Another new feature from O'Reilly is Rough Cuts.  Rough Cuts are preliminary versions of books, made available electronically as they are still being written, generally 2-6 months before publication.  Users can purchase online-only versions (with PDF updates of each revision) or can pre-purchase the print copy, accessing it electronically until the printed version is shipped.  With a nod to Web 2.0, O'Reilly encourages users to submit comments and feedback about the content in their Rough Cuts books, by placing a "notes" widget on the top of each page. For developers working with bleeding edge technologies, Rough Cuts provides early access and an interactive experience.

O'Reilly Media continues to push the envelope in making content available to users in multiple formats and platforms.  Tim O'Reilly's O'Reilly Radar blog is must reading for anyone in the content or technology space.  As one of the few visionaries to "walk the walk", O'Reilly are clearly one of the fifty content companies that matter.

One of the hot buzzwords of 2006 has been vertical search. 

I've been asked moderate the Vertical Horizons panel at the upcoming InfoCommerce Conference, October 10-12 in Philadelphia.  The panelists will include:

• Shannon Holman, Director, Content Strategy & Development for American Lawyer Media
• Jeffrey Dearth, Partner, DeSilva & Phillips
• Han Huang, Director, Product Management for FindGuru (formerly ReedLink), Advantage Business Media

The focus of the panel will be on various business models for vertical search and why content companies are particularly well-suited to deliver vertical search.  We'll also explore what it takes to deliver a compelling vertical search solution.

I'd appreciate your and ideas on vertical search.  What issues would you like to see the panel address?  What markets do you think are currently underserved by search?  Where do you think the opportunities might lie?

I hope to see you in Philadelphia.

SEM provider Spannerworks has released a free eBook entitled What Is Social Media?

The eBook, while brief, is a pretty good introduction to social media for novices.  It provides quick overviews of five major categories of social media:

• Blogs
• Social Networks
• Content Communicies
• Wikis
• Podcasts

The descriptions are high level - this is not aimed at the TechCrunch community.  But, if you're new to social software, or if you're trying to get management buy-in to some of these concepts, it's a quick and useful read.

The eBook was written by Antony Mayfield, Head of Content and Media for Spannerworks.  Antony is listed as a contributor to the Spannerworks blog, SearchSense.  Surprisingly, the blog is fairly sparse and doesn't show off much in the way of social software.  But, this is a new practice for Spannerworks, so we'll have to give it some time to see how they grow it.  And, any eBook that links to the Joy Division/Missy Elliott mashup Love Will Freak Us can't be all bad.

You can download the eBook for free at Spannerworks.

Alacra today announced the deployment of Google Search Appliances as the underlying technology powering the Alacra Compliance Web. 

The Alacra Compliance Web is a vertical search engine used by financial institutions to accelerate the account vetting process.  The Alacra Compliance Web is an integral part of Alacra Compliance, which helps financial institutions employ a consistent and documented process for KYC and Enhanced Due Diligence efforts to meet Patriot Act, BSA and FSA requirements.

The Compliance Web is an index of more than 500 global regulatory organizations, hand-selected and classified by Alacra Content Analysts.  Sites include stock exchanges, government regulators, central banks, state insurance sites and more.  Using Google Search Appliances lets Alacra leverage Google’s strengths in quality and ranking and multilingual capabilities.

One unique feature of the vertical search engine is that it highlights in yellow any "adverse" terms, such as convicted, indict or subpoena.  These highlights help the user quickly identify any critical information among the search results.

Alacra has released, on a limited time basis, a searchable free trial version of the Alacra Compliance Web.  You can take it for a test drive here.

Typical questions that an Alacra Compliance Web Search might answer:
* Is Neoware listed on a U.S. stock exchange?
* Is Segoes Securities allowed to conduct business in the Cayman Islands?
* Has GLG Partners been the subject of any regulatory disciplinary actions?

For more on the Alacra Compliance Web, take a look at the FAQ.

Business Week is reporting that startup PayPerPost has received $3M in funding from Inflexion Partners, Draper Fisher Jurvetson and Village Ventures.

The scam business model behind PayPerPost is pretty simple.  Advertisers can pay bloggers to post (positive) comments about their company or product.  And, there's no disclosure requirement for the bloggers that they've been paid to write these nice things.  Put best by Jon Fine in a previous BW article, "shilling without disclosure is a bad idea."

Of course, the folks at PayPerPost spin it somewhat differently, comparing it to product placement on television or a movie.  But I don't see that.  Instead, it looks more like radio shill host Armstrong Williams, celebrating the "No Child Left Behind" policy without disclosing that he was on the Department of Education payroll.  Or, the Cato Institute fellow who wrote positive editorials and columns, in return for funds paid by Jack Abramoff.

For years, investor relations "consulting" firms offered to write pseudo investment research reports, funded by the company  being written on.  At the same time, various IT consulting firms will write a "white paper" touting various technology for a fee.  Similarly, online seeding and other online "word of mouth" marketing efforts were used to launch the career of Christina Aguilera, among others.

As I've posted previously, one of the great challenges in the world of user-generated content is how to keep ratings trustworthy.  While those questions may not be easily answered, requiring disclosure any time a blogger is being paid for their post would be a good starting point.   

For more on PayPerPost, read Marshall Kirkpatrick's TechCrunch post, PayPerPost.com offers to sell your soul.

Disclosure: I have not been paid for writing this post.