July 18, 2009
at 9:08 AM
I guess its time for another crop of news products from journalists. Why is it that when these guys all go onto the field of battle "once more into the breach" style, they don't understand which side of the Agincourt analogy they are on. They face superior weapons and a difference in culture and ethics. They are the French in this battle. They die.
While I applaud Howard Weaver for trying to switch from defense to offense, he seems to be going off with some pretty faulty assumptions:
Google, Yahoo, MSN and AOL are making more money from online content than the newspaper industry makes from everything. Many billions of those dollars are tied directly to the distribution of news and news searches, and that’s the money news companies must find a way to get.
Let’s say those online giants – call them GYMA – make $15 billion a year from news and news-related content (searches, archives, etc). I think that’s a conservative guess
Uh. No. That's just wrong.
AOL annual revenue is $4.2B, Google $21.8B, MSN ~$2B, and Yahoo $7.2B
So, since the grand total is around $36B, Google news is pretty much a non revenue products, and Google was doing just fine with little or no news results in their main index until the last couple of years. Yahoo does put news ina lot of their products, but certainly, nowhere near 50% of their advertising is sold against news, as is the same for AOL and MSN.
(Oh and last time I checked the newspaper industry advertising revenue was $37.85B)
News is a crap search product, and a loss leader, which is a big reason why Google news was in beta for years, and unmonetized, and why many news-centric searches get no ads next to them.
News is an unprofitable search. Since we at Topix are an adsense partner, and I am a downstream beneficiary to what revenues there are here, I know what kind of eCPM news brings and how hard it is to make money on aggregated "news" content.
Howard goes on to identify his view of the problem:
The problem for news companies is that Google spans the globe, and they individually can’t. Only by banding together to offer the collective judgment of thousands of journalists about hundreds of relevant stories and presenting that in web-savvy ways can they reach the scale necessary to win a share of the billions already flowing to Google, Yahoo, AOL and MSN.
So if you built a news aggregator, powered by journalists, this would somehow unlock the value and get to $1.5B in annual revenues?
NO. YOU WOULDN"T.
If that was true, Daylife, Inform, newsvine and the myriad of other startups would be actually makiing a ton of money and chewing up the pop charts. Or Digg for that matter, or the Huffington Post.
BUT THEY AREN"T, ARE THEY?
Closer to home, I have some experience in running a news site here at Topix, and having talked to Howard while he was at McClatchy (and one of our investors), I am somewhat puzzled since I actually talked him personally about the economics of news search a few years ago.
We've built a site which is,according to comScore, the #2 "newspaper" site online. We actually had a program for a while where' we'd give 50% of all ad revenues back to publishers who wanted to syndicate content to us. Didn't work worth a damn.
An old politician in Juneau once reminded me that “you can’t beat something with nothing.”
One point where I agree with Howard. We've since moved on to try and create community around our news, which is percolating along, and focus on local -- which seems to be an area where we can compete with the lack of anything else out there. The success that we're having is creating a product where Google (or the newspapers for that matter) can't, or are unwilling, to compete on even terms. (Hello no more comments on Google news).
But Jeez, why is it that all the old newspaper guys think there's some giant pile of money at the top of the trust pyramid? There isn't. All the money is at the bottom. In the muck. In the details. Where Gawker plays. Where Techcrunch plays. It's not aggregating the "top trusted content, it's owning a category and being the best and, ideally, only ones there.
Journalists don't win this game. Publishers win this game.
People who care about pageviews and winning, more than they worry about concepts like "trust".
The "bad guys" win.
I’m a real dinosaur in the news business in one respect, at least: I spent the first 20 years of my career in life-or-death competition for readers and revenues. The good guys won (that was us) and I’ve never flinched from a competitive fight since
So, while I again applaud Howard -- I'd just urge him to look with a clearer eye towards what's going on and join the right side here. Really, there is no money in building a news aggregator focused on trust. If anything, it can be a start or a loss leader for whatever your real product is. But it is NOT a strategy for direct monetization.
Trust me on that one.
July 9, 2009
at 9:43 AM
The recent news about Google's new Chrome OS was a great case study in why Steven Berlin Johnson was right about the state of the tech news business.
We had Google with their own blog post, being chased by Miguel Helft & Ashlee Vance at the New York Times (who cheekily self reported that they drove the announcement early, breaking the story after hours), followed closely by MG "Machine Gun" Siegler scooping Michael Arrington (I kid) with what was clearly the best piece of early coverage, and best headline, with the whole list being scorekept by Gabe Rivera's Techmeme.
Then, you had the masses and masses and masses of coverage.
But, take it from a guy who worked at Sun, Netscape and AOL for over ten years, and someone who was Eric Schmidt's only sales guy at the Sun's Office of the CTO for a while -- the BEST analysis of the whole shebang? The best point by point deconstruction of the Google OS announcement? Well, hand it to Danny Sullivan (the number one search analyst with a bullet) to point it out to me -- Fake Steve Jobs.
Freed from having to be a "journalist", Dan Lyons (the man behind Fake Steve Jobs) can't help himself -- he nails it. And the key here? Hyperbole and humor. The list of issues in this blog post is THE REAL LIST OF ISSUES.
Lots of people made the point about Google's focus -- but check out this bad boy:
Point five: What the fuck is going on inside Google? How much more out of control and undisciplined can this place get? How many new goddamn operating systems are they going to create? They've already got Android, and nobody wants it. Now they're going to make yet another operating system, this time out of a browser that nobody wants. What's next? A Gmail-based operating system? A YouTube-based operating system? Honestly, Google, is there anyone in charge over there? Is there anyone who knows how to criticize anything in that fucked up little Montessori preschool of yours? I mean I guess it's nice that you all get to spend 20 percent of your time dreaming up useless shit, and I guess you have to use the Montessori method and tell everyone that whatever little piece of shit they've created is just so wonderful and perfect and beautiful -- but really, as I've told Eric before, that doesn't mean you have to release everything these bozos dream up. There's a word for this. It's called "no." Have you heard of it?
The humor makes the point better than the "real" analysis out there.
Or what about Chrome's current marketshare?
Point four: You also may not have noticed, but nobody uses Chrome. I mean think about it. Do you know anyone who uses Chrome? Really? And you know why nobody uses Chrome? Because Chrome is shit. Just utter, utter shit. I mean they've got all these big brains at Google and you'd think they could make a decent fucking browser. Jesus, the freetards at Mozilla can do it. But not Google. Nope. They gave it their big best effort and what did they come up with? Chrome. It's a joke. I mean, literally, we laugh about it, except when Eric is around. But as soon as he leaves the room we all go "Chrome!" and just burst out laughing.
Seriously. It's the best thing I've read about the whole project.
So what's the bigger point here? Like Jon Stewart, when Dan Lyons starts to rock in his Fake Steve Jobs role, he actually gets to the truth in ways that all the other journalists *want* to, and ends up making his point *better* than if he had to actually use the tone and tenor of a "real" news site.
Similarly, MG's use of the Atomic friggin' bomb on his TechCrunch Post really made the point a lot better about the importance of this than the reporting from a really really good NY Times reporter, Miguel Helft. The NY Times guys cracked the story, and drove those guys at Google to put out their blog post ahead of schedule -- brilliant. But then they're trapped by the leaden prison of reporting "all the news fit to print".
And everyone else said the same thing twenty minutes later
I suppose we should be happy about the range and quality of the coverage here. In this new world, you have to be able to tell the real from the fake -- and I trust those guys at the Times, (and MG for that matter) to tell me what they know to be true.
But I'm putting Fake Steve Jobs on my list of people to read when I want to understand what's going on. Nice job, Dan.