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June 17 2011

12:38

AOL’s regrouped advertising.com is a $500m business

TechCrunch :: Advertising.com Group is a new business unit inside AOL, which includes six separate products: The Advertising.com ad-serving network acquired in 2004) and AdTech, along with more recent acquisitions 5Min, Pictela, GoViral, and the internally built Seed product. (AOL also owns TechCrunch, which is a part of the Huffington Post Media Group). All of that, all together is a $500 million business, which is about a quarter of AOL’s total revenue. AOL is trying to become the ad network for premium brands across the Web.

Continue to read Erick Schonfeld, techcrunch.com

April 04 2011

03:16

Who’s afraid of Arianna Huffington?

The New York Times has been gunning for The Huffington Post lately, which makes me wonder what exactly Arianna Huffington has done to scare or anger them so. Or perhaps that’s the wrong question. Given that our enemies are often those we don’t understand, I wonder what The Times fails to grasp about HuffPo. That then leads to the question of what The Times can learn from this Post.

Felix Salmon has done a skillful job covering this one-way war, this schoolyard taunting in two posts. Times Executive Editor Bill Keller wrote two columns and a blog post going after Huffington—once directly; once without (as Salmon puts it) the intellectual honesty to link to and allow his readers to judge those he criticizes; and once defensively, after Huffington called his bluff. Times staff loyally picked up Keller’s spitballs to lob their own. Media critic David Carr wrote and then killed a tweet sniping about Arianna that he later conceded was “tasteless.” Andrew Goldman didn’t so much interview Huffington for The Times Magazine as he acted like a parody of a TV prosecutor trying to bait a cagey witness—or perhaps it is better described as a comic homage to Joe McCarthy trying to elicit confessions of leftness. Then Salmon points out that The Times snagged a HuffPo scoop without credit. Just now Carr delivers a glancing blow to Aol/HuffPo, reading into a defection a defeat.

What is The Times’ problem? I think it’s that they do not understand what makes Huffington Post successful and they lash out at the unknown. Here, I suggest, is what The Times and Keller don’t understand about HuffPo. Here is what they think is wrong with it:

* Huffington Post is not content. Content is what content people make; if they don’t make it, it’s not content. That, I believe, is The Times’ cultural view of HuffPo: It cannot be content because the likes of The Times have not made it (no matter how many Timesman Huffington hires). That, I theorized, is why The Times and other media temples did not start their own HuffPo’s or buy the original: It’s not real. Even if The Times were to give it credit for the one-third of HuffPo that is content—by dozens of journalists—they’d still say it’s diluted by the other third that is aggregation and the last third that is comment. And that leads to…

* Conversation is not content. When I had Henry Blodget speak with my class on new business models and disruption, he praised HuffPo for its understanding of the value of conversation. In The Times’ view, conversation is what they enable—no, tolerate—when readers chatter under articles once they are finished. As I learn in every damned meeting with news folks I ever have, comments have cooties. All they can ever hear from the vox populi is the voices of the trolls. Blodget and Huffington have a broader sense of the conversation. That was Arianna’s essential insight when she gave celebrities a place to speak; that is conversation. That was Henry’s insight when he learned to listen to what people were talking about so he could join in and add to their conversation. Which leads to…

* Aggregation is cheating. The Times thinks aggregation is not content. Worse, they are coming around to Rupert Murdoch’s view that it is theft. As Jay Rosen tweeted, seen from the readers’ point of view, aggregation is helpful; it adds value to coverage. Indeed, that’s why The Times does aggregate and curate. But when looking for enemies, it’s best not to look in the mirror. I talk (a lot) about the link economy and how there are two distinct creations of value online: the creation of content and the creation of a public (née audience) for it. Aggregators, curators, and commentators bring audience—and value—to content. If the recipient of those links can’t build a relationship of value with the people who are clicking, that’s their problem. At CUNY, I will soon finally have the time to start a research project on the value of links and how to optimize it. I’d like to see this debate about aggregation between The Times and HuffPo occur on economic rather than emotional terms and hope to inform that discussion with facts.

* Free is offensive. Here’s another area in which The Times is coming to side with—gasp!—Murdoch. Now that it has a meter—and without a proven economic basis for it (not yet)—Times people must put the case again, in emotional terms of entitlement: Readers *want* to pay. Readers *should* pay. Times content *deserves* payment. People who question the strategy are demonized. (David Carr attacked me on NPR over just this … we’ve since hugged and made up; this is what I really have to say about the Times’ meter.) Huffington created value—we know the exact amount, to nine figures—out of getting people to write for free (because they wanted to and found value in). She’s cheapening the valuable work we journalists perform, isn’t she? No, like her free writers, she’s valuing something else. She’s valuing the relationships she has with the people formerly known as an audience.

* Left is not right. Goldman’s desperate effort to get Huffington to admit—CONFESS, I SAY AGAIN, CONFESS!—that she’s—gasp!—liberal, taken with Keller’s paeans to himself and his kind of journalism, were as revealing as they were disingenuous. I find Arianna, too, disingenuous in her efforts to sidestep the word the way Roger Ailes won’t own right. All of them want to dump us, the people, in these two buckets, left and right, but they are above classification. The Times’ real problem is not that Huffington a liberal but that she is an advocate of a point of view. So she tweaks The Times for WMDs and upholding antiquated definitions of objectivity and balance.

* Fun is not allowed. Journalism is serious business. It’s no place for kittens.

In my class, I’ve had my students pick a target to disrupt with a new business (after doing that, they’ll turn around and act as the disrupted company to craft a defense—it’s a lesson in finding opportunity in change). The class picked their target: Huffington Post (when I thought they would have picked The Times). Last week, they presented research and what struck me was the difference in engagement at both sites. HuffPo users generate 18 page views per month on average. The Times is defining only a small slice of its uniques—10%? 20%?—as that engaged, at 20 pageviews per month. I say The Times would have better used the $30-40 million reportedly spent on its meter finding ways to better engage its public—multiplying pageviews (fourfold or more?) and consequent ad revenue—while finding new ways to exploit these deeper relationships (data, commerce, events….). The Times knows it needs to increase engagement; that’s the industry’s favorite conference buzzword. The irony of The Times’ meter is that when it succeeds at engaging a once-casual reader, their reward is a wall. That is an economic and strategic question.

How could The Times increase engagement? By learning from Huffington Post rather than snarking at it. Aggregation has value for readers. Conversation is engaging. Fighting for the people—which is what newspapers did, in their good old days—is the most meaningful way to engage with a community. Fun is fine.

I am reminded of the schoolyard, when the boy nasty to a girl and some sage adult would see that he really just had a crush on her and didn’t know how to say it. OK, Bill and Arianna, kiss and make up.

February 15 2011

14:56

February 07 2011

13:23

AriannaOL

They laughed when Arianna sat down to the keyboard. They were wrong. I was wrong, too. I hadn’t imagined that Huffington Post would become the force in media and politics that it became.

Tim Armstrong and Aol are smart to acquire Huffington Post as a media property and Arianna Huffington as the head of content.

I was just thinking yesterday that though Aol has lots of content and plans to make a lot more, I never think to go there, apart from heading to one of its brands, such as Engadget. Portals are burned toast. Making content for search is not, I believe, a growth strategy, as the more Google becomes personalized and successfully seeks out signals of quality and originality, the more SEO will die as a black art. So to execute on its content-and-advertising strategy, Aol needs brands with engagement. Huffington Post is that. Armstrong needs someone who understands that the critical sphere of discovery for content will more and more be people: peers links, not algorithms; Arianna gets that. The company was bought at a high multiple to its revenue but I think the price is not insane. Armstrong didn’t buy pageviews (how 2005); he bought a content and distribution strategy.

The only thing that makes me nervous is hearing Arianna talk with Kara Swisher about the center. No, Arianna, don’t heed the siren call of the view from nowhere! But I can’t believe that’s possible for her. Arianna’s not going to be buying Glenn Beck. Arianna must be Arianna.

One wonders why big, old media companies didn’t buy Huffington Post. The better question is why they never started their own HuffPos. Only one did: The Guardian. When it saw HuffPo, I remember, its response was, ’shit, we should have done that.’ So they did, starting Comment is Free as as vehicle to change its relationship with the public (more than as a business strategy). The New York Times or Washington Post are still too tied to their views of themselves as the founts of all fonts; as far as they may have come, the HuffPo model remains a populist leap too far. TV is is wrapped up in its makeup. I tried to convince many publishers in Germany that they should start HuffPo and not one bit.

So who could have bought and invested in the growth of Aol? Yahoo? Thank God Arianna avoided that black hole of online death. Google, Facebook, Twitter, et al all see themselves as platforms for others’ content, not content themselves. No, Aol and Armstrong were stubbornly going their own way with a content strategy and that’s what made HuffPo an ideal acquisition. Who else could Aol have bought? Gawker Media? No, as friend and professional contrarian Nick Denton keeps insisting, he’s not a blog; he’s not a blogger but a content maker.

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. As a friend of mine reminds me via email from London, HuffPo, thanks to its roots, also has a keen understanding of the value of technology innovation to build platforms. Unlike old media companies, HuffPo groks scale.

And let’s not forget that HuffPo gets journalism. I remember a few years ago when Alan Rusbridger, editor-in-chief of the Guardian, goaded Arianna in a talk before his staff about why she’d possibly want such as them: reporters who cost a lot and are pains to work with. Because their stories get more traffic, Arianna replied. She understands the value of reporting.

On Twitter just now, Jim Schachter of the NY Times (I work with him on the Local via CUNY, so we are brothers in hyperlocal) was wondering what Arianna’s ascension means for Aol’s soon-to-be 1,000-suburb-strong Patch. I think she can get them to add more human voice to it and think about aggregating regional and city-wide issues across them. Arianna has long thirsted after local and Patch gives her the scale to execute her imperialist strategy.

If this acquisition works, it will be because Arianna really is the boss of content and gets to scale her vision and because Aol brings its key strengths–ad sales and capital–to what comes next.

I’ll be eager to see what does come next.

* Disclosure: I forget that I am listed as an advisor to Patch on its site. That should be taken at face value. I have no personal business relationship with Patch. I was asked to join its advisory board but because I have so many fingers in so many hyperlocal pies, I said that I’d be happy to chat with them but not be a compensated advisor. We meet now and again and work together via CUNY’s J-School on Patch in Brooklyn.

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