Content Matters

With Immediacy Comes Great Responsibility

UPDATE (5/26/14): Rap Genius cofounder Mahbod Moghadam has been fired.

Community site Rap Genius sets as their mission to annotate the world - or to become the Internet Talmud. That's a lofty goal and perhaps a worthy one, particularly if they expand into poetry, literature, political speeches and more. But it's also a thorny path, as you look to a community to interpret the words of others.

Rap Genius co-founder Mahbod Moghadam learned that today when he decided to annotate and publish the "manifesto" of UCSB mass shooter Elliot Rodger. 

Defenders of Rap Genius will note that the words of mass murderers are often published and analyzed. But, for the most part, that doesn't happen immediately. Ann Rule's biography of Ted Bundy, The Stranger Beside Me, was published in 1980, five years after his arrest for multiple murders. Moghadam's annotated version of the Manifesto was published just a day after the shootings, at a time when the names of some of the victims have still not been released.

Making the matter worse, Moghadam's comments seemed to reinforce some of the rawness of the crime itself. In perhaps the most egregious example, in a reference to Rodger's sister, Moghadam's comments try to interpret the shooter's feelings towards her, saying "My Guess: his sister is smokin hot".

(image credit: Gawker.com)

While this text was later edited out of the Rap Genius post, it was at best insensitive and inappropriate, particularly since social media has been dominated all weekend with the #YesAllWomen hashtag. 

But the core issue, in my view, is that, while the immediacy of the web enables, and often encourages all of us to "publish" events as they happen, that doesn't mean that we should.

Traditional news outlets have editors who set policies and help journalists make decisions about what information should be shared when. Those of us (including bloggers like me) who do not have a background in journalism, nor editorial oversight, must make those decisions ourselves. And while I'd argue that having a layperson try to interpret the meaning of a mass murderer's comments, with no context nor professional experience, is a wrongheaded effort, the timing of it becomes a key factor as well.

Just a week or so ago, there was great debate about whether it was appropriate that the 9/11 Memorial Museum in New York City sell high-priced trinkets at a gift shop. Personally, I've been more offended by the politicians who have spent the past 13 years grandstanding in front of the site, but I can see the view of those who were upset by the gift shop. Yet, the Holocaust Museum has a similar gift shop that generates no such outrage. And a major difference, in my view, is the passage of time.

If Rap Genius wished to annotate the manuscript a year or two from now, it wouldn't generate much attention. Of course, it wouldn't generate many page views either, which was clearly a driver in getting it posted today. 

But the immediacy of the web requires us to gauge public response to our actions and to decide what we want our role to be in doing so.

 

 

 

 

 

Why AOL – HuffPo is a Smart Deal

The big media news this morning was the AOL (AOL) acquisition of the Huffington Post. HuffPo had long been considered the diamond of the alternative media world. The only online newspaper site with more traffic than HuffPo is NYTimes.com.

Many argue that it may be too little, too late for AOL, but I’m not so sure. Content may not be King (platforms like Facebook, Google and Twitter have proven that), but traffic can still be monetized.  By adding HuffPo, along with Engadget and TechCrunch, AOL positions itself strongly in the upper and middle segments in terms of quality content, while it already covers the lower end with its Seed platform.

The acquisition strengthens their position in local news, augmenting their existing Patch platform. And, HuffPo gives AOL much greater potential reach for Wow, it’s daily deal/Groupon clone. And the large AOL  sales force should be able to generate much higher revenues from the Huffington Post.

Key to the deal is Arianna, who will bring a clear voice to their disparate content properties. As Felix Salmon writes:

It’s smart, and bold, to put Arianna in charge of all AOL’s editorial content, since she is one of the precious few people who has managed to create a mass-market general-interest online publication which isn’t bland and which has an instantly identifiable personality. That’s a rare skill and one which AOL desperately needs to apply to its broad yet inchoate suite of websites.

Meanwhile, Jeff Jarvis notes:

Content alone isn’t enough for Aol. It has content. Lots. What HuffPo and Arianna bring is a new cultural understanding of media that is built around the value of curation, the power of peers, the link economy, passion as an asset, and celebrity as a currency.

Yet analysts remain cautious about AOL. Macquarie’s Ben Schachter advises clients to “wait on the sidelines”, while Clayton Moran at the Benchmark Company notes that the $315m price tag is “more than 40% of the $802 million in cash that AOL had on hand at the end of last year. The acquisition price is a bit of a stretch.”

There are really only two major online content companies left – AOL and Yahoo. With this acquisition, AOL takes a big step forward.  As Keith Rabois points out, with this acquisition, AOL becomes a more attractive acquirer for startups and entrepreneurs than Yahoo.

As newspapers experiment with moving content behind the paywall, it creates additional opportunity for free news sites. With a mix of topical, political and local content, AOL is positioning itself to fill any void. Of course, the proof will come in the months that follow. Will authors look to be paid? Will Patch integrate nicely with HuffPo? Lots of questions yet to be resolved, but this is a smart deal and it has a good chance for success.

 

Paper.li Never before has so much published content been read by so few

If you're active on Twitter, you've no doubt run across paper.li, the app that automatically creates a daily "newspaper" based on links within tweets. The concept behind paper.li is pretty straightforward. Users identify a set of Twitter users and/or hashtag topics you want to follow, and paper.li will automatically create and tweet out a "newspaper" spotlighting the key stories linked to in those tweets.

In order to help promote the service (and, in theory, the user who created that *newspaper*), the auto-tweet mentions the twitter names of the users listed on the "front page".

In theory, this is all fine and good. But in reality, no one ever bothers to read the paper.li content. It's simply Twitter spam. In fact, it's generating blog posts like this Boing Boing Post on How to Kill Paper.Li Mentions on Twitter. and frequent tweets like this one from @timbray:

The problem with Paper.li is not that the idea of aggregating links from Twitter is bad. In fact, that's a really useful thing to do (particularly when combined with Twitter lists). The problem is that a personal "newspaper" should be designed for consumption, not for publication to others.

Some of the iPad news apps get this - products like Flipboard do a great job in aggregating and organizing stories based on Twitter links. But the Flipboard publishers understand that it's about determining what you want to read, not about sharing it with others.

For now, Paper.li just doesn't seem to *get* that and that's why they're just Twitter spam today.

 

Salesforce Acquires Jigsaw, Shifting Prospect Data Landscape

Salesforce.com (NASD: CRM) acquired Jigsaw in a deal worth $142m this week. Once described by TechCrunch’s Mike Arrington as “one of the most evil companies on the planet”, Jigsaw has leveraged crowdsourcing of editorial content to effectively transform the prospecting database segment of the content industry.

For those unfamiliar with Jigsaw, they’ve built a prospecting database using a simple premise: sales reps could enter “business card info” for their prospects and clients, accessing one free record for each they uploaded. While no sales reps will give away their “Glengarry leads”, Jigsaw understood that one sales reps trash was another’s treasure, and reps would gladly share info on non-active prospects in return for new leads.

Jigsaw has transformed the industry in a few ways.
First, and most obvious, is the use of a crowdsourcing model for data maintenance. The crowdsourcing model is compelling for several reasons:

• Cost structure is low, as you push the cost of maintenance to your users. In Jigsaw’s case, they developed a thriving community who would actively source and update contacts in the Jigsaw database in return for free access to the service. Over time, Jigsaw found that by providing a “leaderboard” of the most active in the community and a marketplace for selling the points acquired by cleaning data, a subset of these users were updating thousands of records.

• Scale and reach go beyond what any traditional data collection process could provide. Today, Jigsaw has more than 46,000 people at Deloitte LLP, for example. Traditional people databases might capture 50 or 100 or maybe 500 executives at a firm like Deloitte. But they’d never be able to navigate the structure of a firm that large to amass that number of contacts.

• Maintenance is the greatest challenge for people databases. It’s easy to aggregate a bunch of names and titles, but once you go beyond the C-Suite, it’s incredibly difficult to maintain that information. Jigsaw implemented a crowdsourcing model where its users could challenge and update any records that were incorrect. In other words, every time a sales rep dialed an outdated number or had an email bounce back, rather than getting annoyed, they had an immediate opportunity to gain “points”  by updating the record in Jigsaw.

 
The second, and less obvious change that Jigsaw has brought is a mass-market data cleansing & management solution. While Jigsaw is known as a prospecting database, a large part of its revenue comes from selling what it calls its “graveyard”. Customers with large CRM databases can compare their data to the Jigsaw graveyard, identifying and cleaning up any “dead” records. For those records that are active, Jigsaw can append missing or updated information such as direct dial phone number, new titles and more.

Acquiring Jigsaw is a very smart move by Salesforce.com. Since the birth of the CRM industry 20 years ago, one of the biggest challenges has been populating and maintain quality data. The way to get sales reps, generally averse to any kind of reporting, to actively use a CRM system is to provide compelling leads. Unfortunately, maintenance is often an afterthought, so even those systems that get off to a good start often become a neglected mess of useless information.

For traditional aggregators of people data, this will place added pressure on what was already a difficult market. Providers such as InfoGroup, D&B, Leadership Directories, Hoovers, ZoomInfo and others will need to step up their game. While each of those providers can point to core markets where they provide specialized services not offered by a generic database like Jigsaw, a significant portion of their revenues come from more general use of their data. As Salesforce more closely integrates the Jigsaw platform, it will make it significantly more difficult for these businesses to succeed.

Congratulations to Jim Fowler and the Jigsaw team. They’ve built a rapidly growing, highly disruptive business in an important segment of the content industry.

(Note: Jigsaw was named one of the "50 Content Companies that Matter" by the Content Matters blog in December, 2005).

Professional Blogs Turn to Research for Added Revenue

In recent years, the line between blogger and industry analyst has been continually narrowing. For technology professionals in particular, much of the product and industry analysis that came from IT analyst shops has largely been replaced by blogs. That's not surprising. Many IT analysts now blog and others who have left the big shops like Gartner or Forrester have started independent blogs.

What's interesting is that now, as the online advertising market has dried up, a number of professional bloggers are now turning to paid research as an additional driver of revenues.

Today GigaOM announced the launch of GigaOM Pro, a subscription-based syndicated research site, that will be available at the modest price of $79 per year. GigaOM Pro will focus on a handful of tech sectors - Green IT, Mobile, Infrastructure and Connected Consumer - and will use both internal resources (newly hired Research Director Michael Wolf, formerly of ABI) and freelance analysts.

Last year, ContentNext, publisher of PaidContent, MocoNews and ContentSutra, hired ex-Merrill Lynch analyst Lauren Rich Fine to head up a proprietary research effort. They've released a few detailed reports, most recently a social media report called Following the Money.

Earlier this month, ReadWriteWeb released their first premium report - ReadWriteWeb's Guide to Online Community Management, a combination of case studies, best practices and an online component which aggregates relevant stories on the topic.

And, it's not just technology companies. Financial blogs are exploring the same paths. Footnoted.org recently launched Footnoted Pro, a subscription-only online newsletter which provides actionable research, augmenting the basic information on the free site.

Meanwhile, StockTwits (while not a blog) has announced StockTwits Premium, an a-la-carte offering of research and tools for its active trader community.

Blogs are morphing into traditional b2b media companies, with three revenue streams: advertising, paid research and conferences. And that's going to raise the bar on the traditional analyst research firms to deliver greater value.

Twitter Quitter Issue a Canard

I'm amazed at how much hype I continue to see about the Twitter Quitters - the stat reported by Nielsen that 60% of new Twitter users are no longer using the service after 30 days.

Story after story quotes this figure and talks about how it it portends problems for Twitter.

That's a bunch of nonsense!

The high abandonment rate among new users is largely attributable to two factors:
1. The huge hype that has occurred, where millions of people who are unlikely Twitter users suddenly give it a shot.
2. The non-existent cost barrier to try Twitter as a user

First, let's look at the hype factor. The hype cycle hit its peak in April, when Oprah used Twitter and CNN and Ashton Kutcher had their contest to see who could hit 1 million followers first. These events brought literally millions of new users to the Twitter signup page, many of whom had no idea what they were signing up for. Are you a fan of Ashton Kutcher? Well, click here to help him win the contest. Do you like Oprah? Have you bought the books from her book clubs? Well, now, take a minute to sign up for this thing that she says is pretty cool.

But the demographics of many of those new users did not suggest someone who was likely to become a regular Twitter user. Just think about the people who've probably asked you about Twitter in the past 60 days.

For me, the tipping point was when my mother-in-law, a 75-year-old woman who's never used a computer (nor flown on an airplane, but that's a different story) asked about it. If she had a computer, she might have been willing to try Twitter, but there's no way she'd give it more than about three minutes.

Second is the ease in trying Twitter. It's free and doesn't require the user to download or install anything. Basically, if you're willing to register, you're now  a user.

Taken together, you have a huge audience of people who probably did not understand Twitter, but were willing to invest two minutes to register because it seemed momentarily of interest.

Now take a look at what we know about Twitter. First, the network effect is critical. Until you follow at least a few dozen people, there's not much to read, and until you have a similar number following you, conversations don't occur. So, if you signed up to follow Oprah, you might see one or two tweets per day. Not a very exciting user experience. Twitter only works when you follow a community of like-minded people. That happens when you are introduced to Twitter by friends, business peers or other communities. It doesn't happen when adoption is driven by the mass media and celebrities.

The original Nielsen study compared the Twitter retention rate with that of MySpace and Facebook, which each achieved 60% retention at a comparable level of users. But those comparisons make no sense. In the early days of Facebook, usage was spread among college students, a perfect peer community. MySpace adoption was largely among teens - again, perfect for viral growth.

To assess the real retention rate of Twitter, it would be useful to eliminate those casual users who joined Twitter to follow Oprah or Ashton or CNN but never got engaged. I'd like to see what the retention rate is for those who reach a minimum level of engagement - perhaps following ten or more users, posting at least ten tweets and, say, adding their own image to their Twitter profile. I'd guess that retention rates among users who meet those criteria are significantly higher than 40%.

Based on that, I think that the Twitter Quitter issue is largely a canard, though the overall number of Twitter users is also a bit of a mirage, since it includes a lot of these one-time users. Rather than 32 million users with a 40% retention rate, the real figures are probably closer to 25 million users and a 50% retention rate.

Going forward, as Twitter looks to become mainstream, retention rate will be critical. Twitter will be well-served if it continues to cultivate a strong ecosystem of communities. It will be these grass roots communities of interest that will fuel Twitter's growth, not mass-media driven hype.

What do you think?

Twitter for Business

I probably get asked more questions about Twitter these days than virtually any other topic. How does it work? Why do you use it? Is there a business case for Twitter? Not a day goes by without me getting these types of questions. At the Information Industry Summit this past January, there were about a dozen of us tweeting the conference, and numerous people stopped by to understand more about what we were doing.

In an effort to answer some of these questions, I'll be moderating an SIIA brown bag lunch on Wednesday, April 22. We'll start with a brief overview for Twitter newbies, then move to a panel discussion which will focus on tangible, practical applications for Twitter for business.

We've got a top-notch panel including:
Jake Harris, Senior Architect at New York Times Digital. The headline twitter account for the New York Times has more than 280,000 followers today. That's more than a quarter million people who have signed up to receive tweets of NYT headlines. Jake, who authors the Open blog on nytimes.com, recently gave an internal talk at the Times to help their staffers better understand Twitter. If you're looking to understand how traditional publishers can leverage social media, you'll want to hear Jake's insights.

Phil Pearlman, Director at StockTwits. Interested in how to leverage Twitter for lead generation or to develop a community? In just months, StockTwits has built from scratch a community of 20,000 active investment traders, all through word of mouth on Twitter. In the coming weeks, StockTwits will be announcing some advanced services they will be able to deliver to this community. Phil will share with us his experience in building an audience for pennies leveraging Twitter.

Sarah Austin, founder of Pop17, a daily 2-3 minute video cast that focuses on what she describes as the cultural phenomenon of online micro-celebrity. Sarah Austin was one of the first live streaming, life-casters popularized on Justin.TV and now hosts a weekly live show in conjunction with Pop17 at Mogulus. Sarah works with sponsor Real Time Matrix, helping brands understand how to work with social media.

The brown bag will be held Wednesday, April 22, from 11:30am - 1:30pm at the McGraw-Hill Building in New York. It's free for SIIA members and $50 for non-members. This event is sure to book up fast, so reserve your spot now.

Ten Best Financial Blogs: Barry Ritholtz' The Big Picture

In markets like the present one, it’s good to start out with a macroeconomic view of the world.  And there are few better places to do so than Barry Ritholtz’ aptly named blog, The Big Picture.

Macroeconomics can be dry, but Barry Ritholtz makes the topic exciting and accessible. He has the eye of a skeptic and blends quantitative analysis with an understanding of economic and market fundamentals. The Big Picture makes good use of graphics – charts, tables and the occasional comic strip, to make even complex issues understandable. Pop culture references make it an enjoyable read.  After all, how many economists count Amy Winehouse, Lily Allen, Vince Guaraldi and Clap Your Hands Say Yeah among their musical favorites?

But the Big Picture provides serious information. The blog voiced early warnings about the subprime credit crisis and often questions prevailing market opinions. In addition to its coverage of economics and the markets, the Big Picture provides a focus on the energy sector and digital media.

Ritholtz comes from the practitioner side of the business. He presently runs an online quant research firm, FusionIQ and publishes research through his Ritholtz Research & Analytics business. He previously was chief market strategist for the investment bank Maxim Group.

There’s no shortage of economic blogs on the web (several dozen are listed on the Big Picture blogroll) but few if any make macroeconomics as accessible and relevant as the Big Picture.

The Ten Best Financial Blogs:
10. 24/7 Wall Street
9. The Big Picture
8.
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The Ten Best Financial Blogs

In a couple of weeks I will be moderating the Financial Bloggers’ Panel at BlogWorld in Las Vegas.  Financial blogging was one of the first growth segments for blogging and there are numerous compelling financial blogs today.

Like the financial markets themselves, financial bloggers are somewhat more diverse than blogs of other industry segments.  They run the gamut from macroeconomics to fundamental analysis to technical analysis blogs. The bloggers include many practitioners from the financial community, economists, academics, business writers and numerous individual investors.

Over the next few weeks, I will post my list of the Ten Best Financial Blogs.  For purposes of this list, I am including blogs that are financial in focus and excluding those which are focused on a given market segment. I’ve also limited the list to blogs which are free and open; FT Lex is one of my favorite blogs but they keep it behind the pay wall, so it won’t make the cut.  Last, I plan to exclude aggregators. SeekingAlpha and Blogging Stocks are great sites, but they aggregate of dozens of blogs, so they don’t qualify for this list.

So, what makes a blog a top ten blog?  Like any top ten list this is a qualitative decision based upon my likes and dislikes.  But here are a few of my criteria:

• It should make me think; the blogosphere is an echo chamber and there are dozens of places to get the news. My top ten are sites where the author has uncovered new information or provides new perspectives on existing data.
• If not entertaining, it should be at least readable. There are limited hours in the day and I can’t spend my time reading drab comments. Some on my list are downright funny, others are a bit snarky but all qualify as infotainment.
• It points me to things that I would have otherwise missed. One of my favorite blogs (though as an Alacra blog, it wouldn’t be fair to include it in my top ten list) is our own Research Recap.  The primary role of Research Recap is to help financial and business professionals find nuggets of useful information which they would have otherwise missed. While none of them are quite as focused as RR, most of the blogs on my top-ten list view this sharing role as part of their mandate.

I welcome in the comments your thoughts on the blogs I’ve selected and those I may have missed.

Covestor Brings Social Media to Investing

Covestor launched last year as an investor platform that tracked real portfolios and actual trades, allowing individual investors and investment advisers to build a documented track record. Recently, Covestor opened up its platforms - until then, you could only view others' portfolios by entering your own trades. Now, anyone can sign up and get investment ideas from others.

I recently had the chance to catch up with Covestor co-founder Simon Veingard.

Content Matters: Tell me a little bit about Covestor
Simon Veingard: Covestor.com aims to de-institutionalize money management. We provide a real-trade sharing service that offers self-directed investors the opportunity to compete with, and be rewarded like professionals.  By sharing the work they already do for themselves Covestor enables them to build their reputations, and eventually earn fees based on proof of their investment record.
We are the only service to share what real people are really investing in, not stock picks, commentary or fantasy investing, and is the only service that will allow member’s to benefit financially for the hard work they are already doing.

CM: Where did the idea for Covestor come from?
SV: One of my co-founders has a cousin who lives in Venezuela and works for a local oil company.  His hobby is to invest his own money in stocks and shares in his spare time, covering about 20 local oil stocks, and he is pretty good at it.  Whenever he would tell us what he is doing we would all love to copy him but actually we would love to be able to give him $50,000 and say to him ‘whenever you do something with your own money, do it with ours and we will happily compensate you for it’.
Given the increasingly level playing field between so called ‘professionals’ and private investors – the same access to information, markets and transaction costs – we therefore wanted to enable people to invest alongside brilliant individuals rather than in expensive funds.

CM: My first boss told me that the secret to financial success was to find a money manager you believe in and invest with them. At the time (in 1985), half our company pension fund was invested in Berkshire Hathaway stock and we did quite well.  How does Covestor help people find the next Warren Buffett?
SV: You’re absolutely right – investing is all about great people who’s investment strategy you buy into.  So with the levelling of the playing field, why shouldn’t individuals compete with professionals for fees.  If you take a look at the Covestor Rankings you’ll see the investment talent on Covestor already doing the hard work for themselves and delivering great results.

CM: For some, the idea of sharing their investment results could be scary. What have you seen as the driving reasons why someone might share their results openly?
SV: Our members have told us that they share their investment activity on Covestor mostly for the following reasons:

• to build a verified track record and develop a reputation which provides real credibility both on Covestor and elsewhere on the web
• to keep better track of their portfolio as Covestor provides professional grade tools to measure performance that they can’t get with their broker. 
• to enforce investment discipline as their trading activity is being followed by others.
• to eventually earn fees.

CM: Tell me about the community aspects of Covestor.
SV: Fundamentally, investing is a social activity – people like to share ideas and interact.  Covestor has a number of community features to facilitate this interaction and build relationships and credibility of our members, including:

• allowing members to coat-tail like minded investors – members can track others trading activity and receive notifications of their trades live.
• direct access to investors – not possible with professional fund managers – investors provide rationales for their positions and interaction is encouraged with blog and ‘ask me a question’ features.
• ability for investors to export their investment credibility anywhere else on the web with Covestor Widgets enabling them to prove they’re really doing what say they are.

CM: You can never time the market, but it’s not been the greatest year to launch an investment-related application. How is the credit crunch and bear market impacting your growth?
SV: Volatility is the best time for Covestor.  In both bull and bear markets investors want to know what how they should best manage their investments and ultimately with lots of big funds losing money, it’s a good time to be looking for better alternatives and Covestor is a great place to find great people who are consistently performing.  And accessing all this talent is free.

CM: When you first launched, in order to monitor others, you had to share results from your own trades. Last month, you opened the system up so that anyone could track others, whether or not they shared their own trades. Was that always the plan or did something steer you to do that? What’s been the response/reaction?
SV: You are absolutely right, when we launched we intentionally set an incredibly high hurdle for membership in order to recruit smart and serious investors who were prepared to share their real trading activity publicly on the site.
When we had generated sufficient liquidity with thousands of self directed investors building verified track records our plan was to open up Covestor membership to enable others to sign up and benefit from this expertise and allow the investors to build a greater following.
Since opening up and allowing anyone to join we’ve had a fantastic response, surpassing our expectations.  Our members’ investment performance speaks volumes and so it’s perhaps unsurprising they have attracted a following from so many new members.

CM: I’ve seen that a handful of professional investors have been using Covestor as part of a social media marketing strategy.  Long-term, do you want Covestor to become the platform for professionals to demonstrate their track records? Do you think that it’s important to differentiate professionals from amateurs on Covestor?
We are completely agnostic to the background of our members.  We’d actively invite professionals to join but we think self-directed investors are the real heroes out there doing all the hard work for themselves and we are providing them the platform to showcase their investment prowess and ultimately compete with the professionals for fees.

CM: In professional asset management markets, many individuals will initially launch multiple portfolios, then close those that underperform, leaving a track record only for the top performers. Are there aspects of Covestor that limit the ability for someone to erase the tracks of bad results?
SV: Yes, we do not allow users to tamper with their investment record and there is no selective reporting.  All trading activity is verified.

CM: What’s coming next for Covestor?
SV: We are building an asset management business that happens to recruit its investment talent via the web rather than head hunters.  We will shortly be launching the capability for members to continue to share their trades for free or to earn fees. 
If they choose to get paid anyone following them will have to follow their investments with money, i.e. to fund a managed broker account which will track the trades of the lead investor. The lead investor will be compensated for the information they are sharing and Covestor will take a management fee.

To learn more, visit Covestor and set up a free account.