Content Matters

The early days of Internet publishing can be considered the “field of dreams” period - Build it and they will come. Those were the days of mega-portals where Internet users would come to find content. Content distribution was easier then. Most publishers simply built their own portal and/or inked licensing deals with companies like Yahoo, Lycos and AOL.

As if we didn’t have enough evidence, the current conditions of Yahoo and AOL make it pretty clear that the field of dreams days have ended. Internet users are more sophisticated now and they don’t need some mega portal company deciding which content they should look at. The deportalization of the Internet (as Fred Wilson and others have described it) is here and users today want to be in control of what content they get, where they access it and how it should be arranged.

For publishers and aggregators, this means that you can no longer simply make your content available on your proprietary site; instead, you need to package your content up and make it available where the users are.

Alacra today launched its first widget, the Alacra Affiliate Widget, designed to get content in front of potential users wherever they may be.  The Alacra Affiliate Widget is a widgetized version of the Premium Content Ad Network which we launched earlier this year. You can see the widget scrolling in the right-hand column of this blog.

The Alacra Affiliate Widget displays contextually relevant content (available for purchase at www.alacrastore.com) based upon the content of the page it runs on. The goal of the Widget is to help readers of blogs, financial news or commentary websites to identify related content that may be of interest to them.

For bloggers and website owners, the Alacra Affiliate Widget provides new ways to monetize their traffic. The widget is built on the Alacra Affiliate Program, so bloggers and website owners share in the revenue generated by reader purchases on the Alacra Store.

For Alacra content partners, the Alacra Affiliate Widget enables them to get their content in front of potential buyers while those buyers are in the midst of researching or reading about a company. The ads are contextually relevant, so they serve up headlines on companies that are mentioned in the blog post or article they are already reading. In addition, they are behaviorally relevant as they serve up research content at the time a user is researching a company. Compare that to a typical display advertising network – if a user is reading a page on a financial commentary about HP’s intended acquisition of EDS, a typical contextual ad server will return ads for Hewlett Packard printers or laptops. But, clearly, no one’s reading that article because they want to buy a printer. With the Alacra Widget, the user will see an ad displaying links to recent credit and investment research on HP and EDS, as well as M&A analyses and, perhaps, transcripts from HP’s analyst call discussing the deal.

If you’re interested in exploring ways to better monetize your blog or website traffic or wish to learn more about the Alacra Affiliate Widget, drop me a note at barry-dot-graubart-at-Alacra-dot-com. Or, click here to configure and download the widget.

More details about the Alacra Affiliate Widget can be found on the Alacra Blog.

Via PaidContent comes word that private equity firm Avista has written down 75% of its original investment in the Minneapolis Star-Tribune. The firm acquired the Star-Tribune in late 2006 for $530 million.

In a letter to shareholders, Avista states "In the past year, the newspaper industry has suffered greater than expected declines in circulation and advertising revenue, particularly in print classified advertising."

Greater than expected? Expected by whom? There were a lot of people (including this blog) who have made strong arguments for some time now that the newspaper industry is dead.

During the past 18 months there have been a number of newspaper acquisitions, many by supposedly smart people. Private equity firms boldly entered the market, thinking they could work the same magic they'd worked in manufacturing companies. But turning around a broken company is one thing; turning around a broken industry and a broken business model is something else altogether.

The excuse du jour is that the newspapers didn't anticipate the impact that Craigslist would have on their classified advertising. Again, that "anticipation" problem could have been easily solved had they read this blog, Ken Doctor, John Blossom or any of a dozen others. Or, perhaps attended any of the many conferences like Information Industry Summit, BSeC or PaidContent events where this has been flogged (like a dead horse) for the past few years.

But speaking to executives at the Argyle Forum (via Silicon Alley Investor), former Time and WsJ editor Norm Pearlstine says that much of the problem is the lack of innovation by newspapers during the 1980's when they had huge margins.

The last game-changing innovation by a major newspaper chain was the launch of USA Today, in 1980.

Pearlstine suggests that we are headed back to a highly fragmented news market, like we had at the end of the 19th century when each city had dozens of small newspapers. He feels that newspapers cannot afford to support the type of investigative journalism that we've had in recent years.

That would be a big loss as investigative reporting is needed to balance the powers of government and business. I hope that some major newspapers can maintain that level of reporting (perhaps funded by benefactors not looking for profits) but it's pretty clear that there will be a lot fewer that will offer substantive reporting in the future.

UPDATE: It turns out that there's one more critical news source who is ahead of the private equity firms in figuring out that the newspaper industry is broken. Here's a new article from a great source of investigative reporting themselves - The Onion: Dying Newspaper Trend Buys Nation's Newspapers Three More Weeks. Killer pseudo-quote:

It's nice to see that the printed word is still, at least for now, the most powerful medium for reporting on the death of the printed word.

Dow Jones has acquired business intelligence technology company Generate, Inc.

Generate, led by identical twin co-founders Tom and Darr Aley, is among the leaders in harvesting web content. They have been able to productize and monetize this capability, where others like ZoomInfo, have struggled. They combine this with semantic analysis of text, to identify business events, which trigger alerts.

Combining Generate with Factiva Salesworks, should create a competitive sales intelligence application. Dow Jones has strong market penetration and many feet on the street; with this improved technology and content, they should make strong inroads into this market.

Congratulations to Tom and Darr, Debbie Perry and the entire Generate team.

The lead story on 60 minutes tonight was on sovereign wealth funds, and, in particular, on the recently launched Chinese SWF as Lesley Stahl interviewed the funds' CIO Gao Xiqing.

There was not much new ground broken in the interview, but the fact that the mainstream media is now focusing on the SWFs itself is of interest. Throughout history, every society has looked to cast blame for their own ills on a scapegoat (that's the reason that Salem had witch trials); it looks as though we're setting up the SWFs as the fall guys during the impending recession. We've seen similar reactions when the Japanese invested in US real estate such as Pebble Beach and Rockefeller Center and as hedge funds became more influential.

I'm not suggesting that the Chinese would never use the fund in support of their policy goals; it would be silly for them not to at least consider doing so. But, if we're concerned about the Chinese exerting economic influence over the United States, I'd be a lot more worried about the possibility of them dumping some of the half-trillion dollars in treasury bills they already hold.  Flood the market with dollars and they'd send our economy into a tailspin.  But let's not get overly concerned about the Chinese SWFs.  After all, if we want to maintain our economic power, we should stop leveraging our economy and running up our debts.

If I were a sovereign wealth fund right now, I'd probably look to invest my money elsewhere. As the New York Times described the feedback a US-based financier got when pitching SWF's recently:

“They invest in these financial institutions, lose their shirts and then they are criticized in Congress.” They are really upset, he said.

And get this, he added: “If you are a Saudi, you have to get your visa signed off by Homeland Security. I mean, why would you want to bail out a bank — you couldn’t even come to the closing dinner.”

Research Recap has released its first quarter Research Zeitgeist.

Research Recap, launched by Alacra last summer, highlights interesting credit, investment, economic and market research.  Each week, the most widely-read posts are noted in the Research Zeitgeist.  Then, each quarter, a comprehensive Zeitgeist identifies those posts that received the most attention during the three-month period.

The Research Zeitgeist for the first quarter of 2008 was released this morning. Not surprisingly, the most widely read posts of the quarter largely reflected the credit crunch and market turbulence of recent months.

The top posts for the quarter were:

1. Warning Signs Seen in Rising Credit Card Delinquencies (CreditSights)
2. Research Primer: Credit Default Swaps (Fitch)
3. Research Primer: Structured Investment Vehicles (Moody's)
4. Bond Insurer Downgrades Could Lead to Bank Downgrades  (S&P) 
5. Role of Hedge Funds in Subprime Crisis Examined (International Monetary Fund)
6. Subprime Mortgage Lending Primer (NERA Economic Consulting)
7. Market-led Measures Not Enough to Solve Subprime Fallout (Oxford Analytica)
8. Write-down Spotlight Shifts to European Banks (CreditSights)
9. Alternative Proposals to Stem Subprime Foreclosures (various)
10. Audit Integrity Questions Citigroup's Risk Assessment (Audit Analytics)

Hmmm... I think I'm sensing a theme here.  Perhaps if Ben Bernanke were reading Research Recap he might be less afraid to mention the R-word.  I hope that Q2 and Q3 can bring some posts about growth and recovery, but I'm not optimistic.