The New York Times announced that it has over 270,000 subscribers to it’s premium TimesSelect service. PaidContent does some back of the envelope calculations and calculates that they are pulling in $4,954,000 in annual revenue from this venture only 52 days after launch.
Tag: commerce
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Spam Blogs and Financial Incentive
Technorati’s Niall Kennedy posts about the recent spate of spam blogs coming out of Google’s Blogger service and describes Google’s Blogger and Adsense service as parts of a spam suite. BoingBoing first posted Niall’s theory that CAPTCHA’s are no longer a valid block and are circumvented by spammers who redirect the test to eager seekers of free porn. What’s more troubling is that there is no immediate financial incentive for Google to thwart the creation of spam blogs. For every successful spam blog created, the revenue line for Adsense goes up a notch.
Big ol’ disclosure here because I work at Yahoo which is equally concerned and vulnerable with spam. In the interest of generating public debate, I want to throw out this question. Not only am I interested in how spam blog creation can be stopped (more interested in how to take away the incentive to splog, not how to block them), but also interested in the problem of click fraud. The incentive to create a splog is further accelerated with the creation of specialized crawlers that would click all your ad links and generate immediate click-thru revenues along with the more insidious use of zombie networks reported today by Joel on Software.
What can we do to ensure that the tools we have available to communicate and connect are not pulled apart by greedy individuals using automated tools to gain a quick buck? I know it has something to do with authority and trust. Why do we trust our savings with First National Bank at a swank downtown address and not Ed’s Bank in the trailer on the edge of town? Just as we bank at what is most likely a marble-faced edifice in the physical world, is there anyway to add these same clues to reputation in the virtual world?
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Product Blogs, a new business model
My colleague, Loic Le Meur, is interviewed by Shel Israel for their upcoming book on business blogging. Loic shares his story about a T-shirt fanatic who built a community of like-minded T-shirt fans via his blog. His site is now a business which turns the traditional “we-design, you-buy” commerce model inside out (sorry about the pun, couldn’t resist) and solicits his customers for design ideas which they then all vote on. This virtually guarantees a buyer.
I use this t-shirt guy as an example to large corporations, because it shows what can be done in large corporations. They always laugh at me at first. They say, this is a geek writing about T-shirts. I say, no, wait. Our t-shirt guy puts the customer at the center of everything he does in the company. He realized very quickly through the comments that the customer had more ideas about the products than he did. It’s not just about feedback. The customers design the product. I took this idea to L’Oreal. L’Oreal says, we are this global corporation and you bring us a guy who designs t-shirts? I tell them this is the future of your e-commerce. Your customer will be in the center of it all. This goes back to “markets are conversations.” The t-shirt guy has not put a single euro into advertising. It is all word-of-mouth. The customer does everything. He is merely organizing it. What’s important is how the blog moves customers to the center of the organization, rather than over on the edge of it.
Interview on Naked Conversations
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Charlie Wood, RSS as the Information Bus
I wonder how many out there have, upon reading Steve Jobs’ recent commencement address, have reconfigured their life to pursue their dreams. First Richard MacManus cited Jobs’ speech as inspiration. Now, Charlie Wood, VP of Enterprise Solutions of Newsgator, has left his job to start a new venture. Spanning Partners will offer RSS integration services that will expand the use of RSS beyond the mere delivery of posts from blogs to something much broader. At the PC level, you have a data bus which shuttles bits from the hard disk, to RAM, to processor, to video card and back again. In much the same way, RSS could become the virtual delivery bus for information interconnecting all the new APIs which are exposing themselves to the intranet and internet.
This is much the same vision that Microsoft is pushing as part of it’s RSS is Everywhere vision outlined in my previous post. When you start extending the standard to allow for structured content to be exchanged, not just between humans and their readers but between applications and devices, it opens up all sorts of opportunities.
This reminds me of an earlier jam session I had with an engineer at Reuter’s research labs a couple years agon on how structured news feeds from Factiva could automate transactions. In the example we dreamed up, we thought of using Factiva to drive the generation of sales leads for a consulting company. Using filters on the rich meta data that comes with Factiva news stories, an example could be,
- Create a filter to select all stories of all new mergers in my key industry with a dateline of San Francisco,
- The subset of stories would then be fed via RSS to an API which would read these stories, strip out the company ticker symbols and use them to pull contact information from another database such as Hoovers or InfoUSA for the VP of Sales name and email address at each company,
- Use and API to the CRM to check if the prospect was already a client, if not, then populate the VP of Sales contact information into an email template which would address each VP of Sales with a letter of introduction introducing your company’s sales integration services.
All three steps could be done in advance automatically, the salesperson only needs to review the content of the email before sending it off and making a note to follow up.
One quote sticks in my mind from the Channel 9 video mentioned in my earlier post. Precious programmer resources were being wasted as each person had to write their own connector to information. Once you standardize that, the developers can move up the stack and focus on the more interesting task of what you can do with that information.
When market data feeds were moving from analog to digital transmissions, there was a time when everyone was too busy writing feed handlers to really focus on anything more than parsing data. Once the feed handlers were written and commoditized, there was an explosion of creativity that gave birth to sophisticated applications that could throw market data around to drive risk analysis and automated trading applications. I would argue that this enabled the entire field of complex derivative and arbitrage trading that revolutionized the finanancial markets (for better or worse) in the mid-90’s.
Flash-forward to 2005 and we see the same enabler with RSS. Standardize the interface and delivery of information (calendars, inventory, pricing, traffic, reviews, top ten lists, etc.) and then you unleash a flurry of new services that mix and mash the intersection of these pieces of information to create new insight and opportunity.
Pull a list of the top ten albums according to Billboard and cross index with a list of all acts playing at the Warfield in San Francisco in the next two months. If there’s a match, pull together links to reviews from my favorite rock critic and paste them into a page that you call the, “Automatic Concert Reminder” and you’ve got a new service. Add your own unique editorial to each concert and you’ve got a service that adds value and will hopefully attract a readership. Sell tickets via an affiliate link and you’ve got a business.
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nytimes.com surveys readers on $50/year subscription fee
The Wall Street Journal Online reports and BusinessWeek blogs that the New York Times is surveying its readers on two subscription plans that would move them away from their current $2.95/article pricing structure. One plan would offer unlimited access to the past year’s articles for $49.99 and the second would limit access to 100 articles/month but from their complete archive back to 1851.
Access to articles less than a week old will continue to be available at no charge.
In the article, Robert Niles, editor of the Online Journalism Review is quoted:
a move by the Times to offer annual subscriptions to its online archives would “radically” change the pricing structure for newspaper archives on the Web. “They may be hoping that they’ll be getting a much larger market for this lower-priced, all-you-can-eat archival content,” Mr. Niles said. Such a strategy also could help the Times build its brand online. “You want to be the newspaper of record for the United States, and by aggressively pricing your archives … that can help you do that,”
I always wondered where the $2.95/article benchmark used throughout the online media industry came from. It seemed so arbitrary and is now almost ten years old.
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Affiliate marketing offline browser
People always ask me how they can make money writing a blog. The question is like someone back in 1870, a few years after the invention of the telephone, asking how someone can make money dialing a telephone call. With apologies to Marshall McLuhan, it’s the message not the medium.
Interactive advertising is playing an dangerous dance with the bloggers with initiatives such as Marqui that blur the independence of the writers. Affiliate marketing is something that is also unique to the internet and has the potential to tempt bloggers looking for a quick buck. Affiliate programs such as Amazon’s Associate Program pay for purchases that originate via a link on your site. It’s an great solution for spiffing someone that sends business your way but it can be abused at the expense of editorial vision.
There is a whole industry that is growing up around the work-at-home industry of affiliate marketing websites and now there is even a blogging client that will help you compose your text while inserting affiliate links as needed to stress your point and boost your revenue. One hopes that the search folks will keep their spiders groomed so that blatantly advertorial posts will fall off the bottom of the Google & Technorati rankings and keep things relevant but I’m afraid that the capitalistic urge to harvest click-throughs will prevail until we raise the cost of such behavior or the public ceases to buy into tangential links. The fact that there are still so many infomercial programs on television doesn’t provide much hope for any change in the public’s support of such behavior.
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Collective Loan Network
The internet is a wonderful catalyst for busting apart black boxes that mediate experience, knowledge, or commerce. My co-worker Sippey, points to Zopa, a UK exchange network which hooks up lenders to borrowers and, because there’s no middleman, takes only 1% as a fee. Their approach is fresh and they’ve got a few ideas on how to spread the risk of the lenders that fund the network.
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Dining with Yahoo
The folks at SFist write about their dinner with Yahoo where they get an insight into some of the economic shifts that are a result of the changes in the media landscape.
Greg pointed out that in the past, papers could depend on classified ads accounting for up to 35% of their revenue. Now they’re lucky if it represents 15%. And Susan’s friend Bob, who was nice enough to give us a ride back up 101, noted that 93% of businesses in San Francisco have fifty or fewer employees, and that as print publications increase their ad rates to account for revenue shortfalls, small, local businesses are being shut out of much needed publicity, which opens the door for chains and franchises who can subsidize the increased media costs.
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Pay-Per-View Blogging
I was going to post (or should I say pile on) the commentary surrounding Jason Kottke’s three week fund raising drive to support his devoting full time to his blog. As usual, several links later and I’m staring at a service selling a perfect-bound copy of all of John Battelle’s posts for 2004. I blessed Jason with PayPal dust and had to resist doing the same with John’s book, (I didn’t because he’s in the process of boiling down all the great stuff on his site into a book).
For the same reason I bought a copy of suck.com’s book back in the 90’s, I will continue to show my support for good writing on the web and when I can do it with a direct contribution (with a few basis points shaved off the top by PayPal) it makes me feel that much better.