Content Matters

Reuters has announced its acquisition of text analytics provider ClearForest.

The deal, which had been rumored for several months, is thought to be for $25 Million.  The Company had raised about $35M in three rounds of venture financing, but had burned through most of its cash.  Its most recent round, in late 2003, was led by Greylock.  Other investors included Pitango Capital, ABS Ventures/Deutsche Bank, Walden Israel, HarbourVest Partners and JP Morgan Capital (formerly Chase Capital Partners).

According to reports, Gerry Campbell, who joined Reuters last year after heading search for AOL, will head a new strategic group focused on search at Reuters.  Reuters also announced today that it had introduced a new automated service that reads text to determine sentiment.  That product, leveraging technology from Corpora, will be used to drive algorithmic trading.

ClearForest had struggled in recent years, along with peers like Inxight, Attensity, nstein, temis and others.  While the ability to infer meaning from text is compelling, none of the technologies were refined enough for mainstream use and none were able to deliver an ROI outside of the intelligence community.

During ClearForest's early years, particularly while the financial markets struggled in 2001, we reached out to the publishing market.  That industry understood the concept of tagging and we were able to deliver a compelling ROI in the automated tagging of documents.  While that was never intended to be the target market segment for ClearForest, it consistently generated the greatest sales for the companies with clients like Reuters, Dow Jones, Thomson Financial, Elsevier and others.

So, it's not surprising to see ClearForest ultimately acquired by a publisher like Reuters.  While many of us, particularly those there during the early days, were hopeful of a bigger (and more lucrative) endgame, ClearForest's ultimate outcome was much more positive than that of WhizBang Labs, Banter,  GammaSite, LingoMotors and the many other text mining and tagging companies that have long-since vanished.

Congratulations to ClearForest.

Update: For more on the ClearForest acquisition, take a look at these sources:

Finextra
Search Engine Land
Roger Ehrenberg's Information Arbitrage
The Alacra Blog
Ha'aretz Newspaper
Shore Communications

In a somewhat surprising move, credit data provider Experian has acquired HitWise, the web analytics company for $240 Million.

HitWise are best known for their market share comparisons, showing visitors to various web properties.  HitWise data are compiled directly from usage at ISP Network logs.  They compete in the same space as companies like Alexa or Comscore.

At first glance, this seems like a strange acquisition.  Experian's business is largely built around the compilation and delivery of credit data, both in the consumer and b2b space.  While Tim O'Reilly argues that it's all data, I think there's a significant difference between the business models and market segments. 

According to Experian CEO  Don Robert, "We have been successfully repositioning our Marketing Solutions business to meet our clients' needs as they continue to switch more of their advertising spend online. Hitwise, which is a rapidly growing, successful business, brings new, unique data to Experian and complements the existing data, tools and expertise that we already offer to clients in other areas such as research services and email distribution."

The deal should give HitWise potential exposure to Experian's global markets, yet I don't see the synergy.  Am I missing something?  I'd welcome your insights in the comments.

The 2007 SIIA Codie Award winners were announced today at the SIIA's Content Forum.
There are dozens of categories across their four main subgroups - Content, Software and Education.

In the Content Group, this year's winners include:

• Best Online Business Information Service: Factiva
• Best Online Consumer Information Service: Tripadvisor
• Best Online Directory & Business Leads Service: Spoke Software
• Best Blog Aggregation Service: Newstex Blogs on Demand

This year there were also categories for best blogs.  The winner for best Media Blog is John Blossom's ContentBlogger.  Herb Greenberg's Market Blog (MarketWatch) won for best Financial Blog, while TechCrunch won for best Technology Blog.

Congratulations to this year's winners.  The complete list of winners is posted on the SIIA site.

Content Bridges provides great insights into the much ballyhooed addition of McClatchy to the Yahoo consortium. 

It's been clear for a while that the individual newspapers have lost the News war to Yahoo! so this partnership makes sense, if only as a way to stop the bleeding.

As Ken Doctor points out, however, that like a marriage, the announcement of the partnership is only the start not the finish line.  And there are a number of hurdles to come.  Great piece of analysis by Ken.

Enterprise and e-commerce search provider Endeca has been named the fastest growing private company in Massachusetts, based upon the annual ranking by the Boston Business Journal.

Endeca's revenues have grown from $6M in 2003 to almost $70M in 2006.  Endeca's CEO Steve Papa has led this strong growth during a period when many enterprise search providers have struggled or consolidated.  The aggressive approach of sales and Marketing head Chris Reisig also deserves the credit.  Congratulations to Endeca on their rapid growth.

News aggregator Newstex today announced the introduction of an alerting service for blogs.  Last year, Newstex introduced Blogs on Demand, a feed of approximately 1,000 hand-selected blogs focused on various business topics (Content Matters among them).

The new BlogAlerts service expands the Newstex coverage to the larger universe of millions of blogs. 
Enterprise users specify topics of interest which automatically generates a list of alerts.  The alerts are then tagged by the Newstex engine, identifying companies, tickers, peoples and categories.

According to Newstex CEO Larry Schwartz, "BlogAlerts provide comprehensiveness and accuracy not available through traditional blog search tools" like Technorati and Google Blog Search.  "The tagging allows users to set alerts that combine company-specific and topical terms."

Muse Global provides the technology that drives the BlogAlerts service. 

Blogs are becoming a more important source of information, adding color and sentiment to traditional news.  Newstex has established a strong position in aggregating blog content.

...or so say the findings of a new study by the Pew Research Center.

The study, entitled "What Americans Know: 1989-2007" assesses public knowledge of leaders and news events, as compared to 1989.  We might have assumed that the advent of 24-hour news combined with the abundance of websites and blogs would have resulted in a more educated public, but that's not the case.

According to the Pew study, our knowledge of public affairs today is roughly the same as it was eighteen years ago.  But even then, some of the individual responses are shocking.  For example, while 74% of Americans surveyed could name the Vice President in 1989 (it was Quayle, for those who've forgotten), only 69% of those surveyed could identify Dick Cheney in that role today.  Considering he's probably the most powerful VP in our history, and that he was a central figure for both parties in recent elections, it's hard to believe that nearly a third of Americans don't know who he is. 

Conversely, nearly half of those surveyed were able to identify House Speaker Nancy Pelosi, compared to just 14% who knew Tom Foley when he held that role.  In this case, it seems that the Right's efforts to make the 2006 elections about Nancy Pelosi certainly improved her recognition.

Most interesting to me is the ranking of awareness based upon sources of news information.  While many criticize Jon Stewart and Stephen Colbert for satirizing politics, their viewers had the highest percent of "high" scores, ahead of the News Hour, O'Reilly and NPR.  Whether young people will go to the polls in 2008 is still to be seen, but clearly they are absorbing knowledge from their entertainment.

Curious to see how you would score?  You can take the brief survey here.  Only 4% of those surveyed got all 9 correct.

Google has announced its acquisition  of DoubleClick for $3.1 Billion in cash, outbidding Microsoft.

DoubleClick is the industry leader in display advertising placement. Combined with Google's PPC ad network, it provides Google with dominating control over Internet advertising. 

The price, roughly 10x revenue, seems high (particularly in a cash deal) but clearly they did not want Microsoft to gain a strong foothold in this market. 

From an advertiser perspective, this acquisition should be a good thing.  It will allow advertisers to buy all their advertising through one provider.  I'm not sure how media companies will feel about Google playing a bigger role in the control over advertising, though.

If you have a child between the ages of 6-12, you probably are familiar with Webkinz.  Webkinz are basically “Beanie Babies meets Tamagotchi meets Second Life.

Manufactured by Canadian gift wholesaler Ganz and available largely through card and specialty stores, Webkinz are small stuffed animals that sell for $12.95 each.  They’re rather unremarkable, except each Webkinz comes with a unique security code that allows you to register it, providing access to the “Webkinz World” portal.  The portal itself includes a number of games, quizzes and related areas, each of which earn you points (“KinzCash”).   KinzCash can be used to by virtual items for use by your virtual Webkinz in this virtual world.

Part of the user’s “job” is to keep each of their Webkinz satisfied in three areas: happiness, health and hunger.  By “playing” with your virtual Webkinz, feeding them (using KinzCash to buy food and drinks) and providing exercise, you keep their scores high on all three counts.

There’s a modest social networking aspect to Webkinz, where users can “friend” each other or IM one another to invite them to compete at one of the games.  All of this happens between anonymous users and there is no identifying information shared for safety reasons.  You don't have to worry about running into naked avatars in Webkinz World.

My eight-year old has five Webkinz, and colleagues tell me their children have ten or even twenty.  The manufacturer has leveraged the high demand for Webkinz by requiring that Webkinz sellers also buy inventory of their other products.  Much like the Beanie Baby craze of a few years ago, supply is kept fairly low, increasing demand. 

Ganz has employed no advertising, relying solely on word-of-mouth marketing for their promotion.  Launched in April, 2005, more than 1.5 million Webkinz pets have been sold, with over 700,000 registered users.  And a quick search of eBay found more than 10,000 Webkinz for sale, with 93 of them (rare or “retired”) selling for $250 or more each.

What’s interesting to me is how easily even the youngest Webkinz users pick up the system.  While I’m still not a big believer in the concept of Second Life for the business community, it’s clear that virtual worlds are a big play in the gaming world  And Webkinz, along with sites like ClubPenguin and Tweenland have shown that the market entry point for these types of products has quickly moved to the “tween” and elementary school market.

Vertical search engine ZoomInfo relaunched itself earlier this week.  The company, whose primary focus has been as a vertical search engine for biographical and people information, has struggled to this point in identifying a profitable revenue model.

In its relaunch, ZoomInfo now describes itself as a more general business search engine.  Their new business model has a free basic service, utilizing Google Adsense for advertising revenue.  A premium offering, ZoomExec, provides executive profiles of more than 1.3M people, for $99 per month.  At that price point, they are clearly looking to take low-end market share from companies like Hoovers and Leadership Directories.

The new interface is clean and easy-to-use.  When you first land on their site, you see a (static) Tag Cloud, but it seems more an attempt to look Web 2.0 than to actually incorporate any useful Web 2.0 capabilities.

As John Blossom points out, one major change in the new UI is their default to searching keywords rather than companies.  The Company search is still available, but the default is keyword. 

A few test searches yielded fairly accurate results.  ZoomInfo also provides you the ability to refine your search using geographic or revenue information or by selecting related terms.  It's clear that they have invested some efforts in developing strong taxonomy and clustering tools. 

ZoomInfo's crawling and semantic analysis technology has enabled it to build a fairly sizable database of company and people data.  To date, they have faced two challenges.  First, is the issue of accuracy.  ZoomInfo claims to have continually improved their accuracy, but a quick search for Alacra shows they still have our old address (now at least 18 months out of date).  Of course, for many users, 70-80% accuracy at the right price is good enough.  The second and more significant challenge is positioning themselves to the market.  Their earlier incarnation, as a people search engine, allowed them to make strong inroads in the recruitment market, but not as a more mainstream application.  Repositioning themselves as a general business search engine might be a bit too broad in my opinion, but a freemium model, with free content supported by ads plus premium offerings, is certainly the right direction.