News Flash: Social Media News Acquisition

NowPublic, a social media news website, has been acquired by the Examiner.com, a local news network controlled by the Clarity Media Group (Philip Anschutz’s outfit).

The reported price tag: $25 million.

Apparently, citizen journalism sparks interest (and dollars) from Big Media.

And consolidation may help find a sustainable formula that balances coverage (NowPublic claims citizen reporters in over 100 countries) with operational efficiencies of scale.

Hyperlocal News: New Oasis or Mirage?

Despite the flurry of attention (and acquisitions) on hyperlocal news, its prospects as a viable business remain unclear.

No question there is plenty of activity in the space, as Open ePolicy discussed here.

While proponents laud (hype?) the potential market value of hyperlocal -- estimates reach $100 billion -- can anyone entice enough local advertisers to turn a profit?

Local advertisers -- Mom-and-Pop stores -- are the long in "long tail." They are the Last Mile in advertising.

You need staff to create (or at least edit) local content. And once you get there, you still have to compete with CraigsList.

Attention Big Media: The Ultimate Lesson from CraigsList

Media companies are suffering the slings and arrows of online competition for eyeballs and advertising dollars.

CraigsList seems to be the villain of choice, given its outsized role in the collapse of classified ad revenues, the traditional mainstay of newspaper profits.

While simultaneously trying to vilify and emulate CraigsList, most media companies fail to appreciate its ultimate lesson.

CL has plenty of flaws—mainly because it so accurately reflects the imperfections of the masses using it. However, it enjoys spectacular growth while remaining stubbornly committed to a simple (even outdated) design.

The lesson is simple: Pay constant attention to what your users are telling you.

Customer service is the Qi of CraigsList. It is what energizes and sustains its massive community of users.

It also pays.

Excellent customer service breeds customer loyalty. And that makes your content and services more valuable over time while driving down costs.

Don’t know what your users think of your content or services? Then you have found your primary problem. You.

CraigsList, by eliminating marketing, sales, and business development, has eliminated every layer separating its programmers (who run CL) from the users they serve.

No layers = no sound barriers.

User feedback reaches the people who operate CL unfiltered. This can be a painful experience for managers, programmers and writers. But it is irreplaceable if you want to win your customers’ loyalty (and page views).

CraigsList famously responds to annoying complaints with haikus. In this case, their advice to other media companies might be:

Steam rising from rice
User feedback clearing your
Confusionism

More Japanese Robots!!

You can never get enough Japanese robots.

Meet Riba ...

A robot nurse that can lift elderly patients from wheelchairs and beds. A giant teddy bear robot.

Awesome!

Woofer: Antidote to Twitter, or More of the Same?

With a 1,400-character minimum, Woofer in theory offers salvation from our growing Twitter-dom. Or Twitter-dumb.

The three principles of woofing: 1. Be eloquent. 2. Use adverbs. 3. DEA (don't ever abbreviate).

Noble statements.

Encouraging a person to think, compose and express. Macroblogging over microblogging. The anti-Twitter.

Not so fast. In reality, Woofer seems to merely encourage more idiocy and verbal spam.

Hence, a “woof” ten minutes ago that reads:

I am Awesome. I am [Name Deleted]! Hear Me Type! Penis, Penis, Penis, Penis …

When people have nothing to say, why can’t they just say nothing?

Online Advertising Hit, But Print Advertising Got Floored

Media executives may see recent data on advertising revenues from the Newspaper Association of America as a good news / bad news situation.

They would be wrong. It’s all bad news.

Newspaper ad revenues are down 29% during Q2 of 2009. Obviously bad news. But even their online ad revenues had a double-digit drop of 16%.

So what’s the good news that publishers see? The worst is behind them. Wrong again. The worst is still ahead.

The recession only explains half the loss in print ad revenues. The rest (about 13% of the loss) is pure erosion of the print newspaper business model.

As newspaper publishers search for an online news model that can sustain their revenues and newsrooms, they must apply basic investment strategy … diversify, diversify, diversify.

If you are only business is news, you are heading for a cliff. Yes, you need a digital platform for news. But you also need platforms for other categories of digital content. Either build them, buy them or merge with other companies that already have them.

Yahoo Grabs Big Piece of Middle East Internet Market

Eventually, global Internet companies would realize the Arab world is one of the last underdeveloped frontiers for digital media. That day was yesterday. Yahoo bought Maktoob.com, the largest Arabic online portal, for an undisclosed sum, reportedly around $100 million.

This is a big deal. Even Twitter is a buzz with the news.

The Arabic speaking world of Internet users has not been completely ignored. Google opened it first office in the Arab world in 2006, and is the top search engine among Arabic users. Already 8% of Facebook's user base is in the Arab world. Yahoo is not the first major equity investment in a portal in the Arab world (or even a portal based in Jordan). Intel Capital recently invested in Jeeran, a Jordanian based social network with 1 million members. And that was Intel’s seventh investment in Middle East digital media. Last year, Vodafone Egypt bought Sarmady Communications (Sarcom), a digital content company based in Egypt.

But with this deal, Yahoo landed the biggest digital media acquisition to date in the Middle East. Yahoo calls it their biggest geographic expansion in years. I call it a very smart move. Maktoob has been the #1 Arabic website (in terms of users) for years, steadily growing organically and through a series of regional acquisitions. Its acquisition was inevitable. The only surprise is that it took so long. Maktoob has been around for almost 10 years.

320 million Arabic speakers worldwide, but only 1 per cent of all online content is in Arabic. That math adds up to outsized growth as the online advertising market catches up with the rapid rise in Internet penetration and usage in the Arab world. This deal alone may drive increased online advertising in the Middle East, as well as accelerate the shift away from newspapers and print advertising.

So Maktoob becomes Yahoo Maktoob at the price of $6 per user ($100 million for 16.5 million users). Although Middle East entrepreneurs will envy the valuation and the newly minted millionaires among them, that price will look dirt cheap one day. And that day is today.

Murdoch to Create the OPEC of News

Rupert Murdoch has a new idea to make news a paying business again. Call it the OPEC of news.

News Corp is pressing to create a consortium of premier media brands—including the New York Times, Washington Post and Hearst—that charge for online news.

Can this latest effort to re-monetize news work? Assuming it survives antitrust review, can a handful of major media publishers shift the entire digital news market?

The theory seems simple: combine the biggest, most trusted names in the same “walled garden” and people will pay to play, by subscriptions or micro-payments. One cartel, one low price.

But news is not oil. News is not a pure commodity that can be refined into a product with a uniform value regardless of the producer. Can every news producer (or even most) be the Wall Street Journal? Doubtful.

Also, right now, oil has minimal competition. Alternative energy remains more expensive and lacks an efficient distribution network. Online news accessible via the Internet and mobile devices is ubiquitous. Online news sources, aggregators and re-posters are endless, and offer an attractive price point: free.

Online news is sunshine, available almost anywhere. And we the readers are walking solar panels.

The WSJ and a few others like the Financial Times occupy a privileged place in the news space. Frankly, their product is worth more. It is timely and quantifiably valuable, both to readers and advertisers. Indeed, a consortium of premier news brands may prove more valuable for increasing ad dollars than generating reader revenues.

Newspapers are definitely interested in consortiums. In four short months, Journalism Online’s payment platform for digital distribution of news has attracted over 500 newspapers.

Still, I suspect that few news organizations have a critical mass of readers who view them as indispensable, and are willing to pay. An oligopoly of premier news publishers may save those chosen few. That is no guarantee that most publishers, even if collected into a broad consortium, will attract enough paying readers.

Open Data Meets Hyperlocal in San Francisco

Once again San Francisco renews its claim to be the most open city in America, and the most open government.

Mayor Gavin Newsom announced the launch of DataSF.org, a new website offering citizens access to raw, machine-readable government data on a wide range of issues from crime and housing to health inspections and street repairs.

The basic idea behind this initiative? Open data drives innovation. Free access to information gathered by government enables developers and citizen entrepreneurs to create new applications and online services. Open data is exactly what will power the growth of hyperlocal websites, which cater to the interests and needs of local communities.

The emergence of hyperlocal news and online services is already a trend receiving much attention, and investment. MSNBC’s acquisition of EveryBlock, a hyperlocal news aggregator, is one recent example, but not the only one. AOL and even the New York Times have entered the hyper-local space.

Finding the right business model for hyperlocal sites will be a challenge. For every MSNBC and AOL buying in, there is a Washington Post exiting. Success requires real community participation, not always easy to sustain when the website belongs to a big corporate entity, as well as a local advertising base will to spend.

Still, more governments offering open data is a good thing, promoting transparency and public accountability, regardless of whether hyperlocal websites succeed or not.

Twitter Babble

I have nothing against Twitter. I have an account, rarely used and never tweeted. Mostly because I have neither the patience nor the interest for useless chatter, and Twitter is full it.

Don’t take my word for it. A new study looked at a large, random sample of tweets and found – surprise! – nearly half of all public tweets (40.5%) are empty babble.

Most tweets were not shameless self-promotion (think Ashton Kutcher), just pointless drivel. Think tweets like “I am scratching my ass right now.” Pure noise. Twitter spam.

Yes, Twitter proved invaluable to Iranian protestors risking life and liberty to protest recent elections. But “news” came in last place among categories counted, less than 4% of all tweets.

So who is projecting all this mindless crap? Twitter reaches 27 million people per month in the U.S., so the answer is easy …Tweets like us.

Is China Reverse Engineering America’s Future?

Recent news about China made me recall a comment made by my 13-year old niece not long ago: “All those Chinese will come here and steal our jobs.”

For the moment, leave aside a child’s understandable ignorance (and the likely racism of the teachers who fed her such nonsense).

If odds makers tried to determine today’s leader in tomorrow’s economic race between China and the U.S., they might give China the nod.

Consider three, recently reported facts:

China announced that it will extend universal health care to its entire population in 2011.

China will release new fuel efficiency standards requiring a minimum of 42.2 miles per gallon (for every car, not a fleet average) by 2015, far beyond what has been proposed in the U.S. and even farther beyond what any current US-made car can achieve.

In China, the number of students earning first university degrees in engineering far exceeds U.S. levels.

Think graduation statistics in China are bogus? Consider a fourth fact:

China’s Tsinghua and Peking Universities are now the top feeder schools for American PhD programs, with the largest shares in the natural sciences and engineering.

Back to my niece’s comment. Not only is it wrong on the facts today, it is wrong about tomorrow. According to a 2008 survey, only 10% of Chinese students in the U.S. want to stay here permanently. Barely half (54%) even want to work briefly in the U.S. after graduation. They are taking their degrees back to China, where they see brighter, long-term economic prospects. Can anyone say “Back to the Future?” Or reverse engineering?

Not convinced where the trend line is headed? It is not only American-educated Chinese students returning to China. The number of young Americans seeking (and finding) work in China is rapidly rising. Yes it is partly a reflection of today’s recession in the U.S. It also says something about tomorrow’s future in China.

Climate Change Puts National Security on Thin Ice

Sarah Palin, Congressional Republicans and other flat earthers may reject the science of climate change and evidence of man-made global warming. U.S. national security agencies, however, take the threat of global warming seriously.

These are not merely pollyannish predictions from lefty academics. This is coming from analysts at the CIA, the Pentagon, Center for Naval Analysis and US Army War College who all consider the risks of global warming real, and a threat multiplier. Dennis Blair, Director of National Intelligence, agrees. His testimony before Congress stated that the Intelligence Community believes "global climate change will have important and extensive implications for US national security interests over the next 20 years."

Doubters routinely dismiss or downplay observable changes like glacial melt, rising temperatures, coastal inundation and extreme weather events. Intelligence analysts, however, link them to specific national security threats like scarcity of cropland and freshwater, population displacements, new disease vectors, resource conflicts and political destabilization. Even the loss of vital US military bases.

Climate changes are not maybe's or aberrations. They are measurable.



Last week, the U.S. National Snow and Ice Data Center reported that the polar ice cap shrunk an average 41,000 square miles per day in July, well above the historical average and equaling the rate of melt seen in 2007 when the North Pole ice hit a record low. Top 3 years of fastest ice melt? 2007, 2006, 2009.

If climate change skeptics won't take facts seriously, at least military planners do. The Pentagon is wargaming scenarious that incorporate climate-induced crises in vulnerable regions (like South Asia and the Middle East).

At least some in the US Senate are taking notice. The Foreign Relations Committee recently held hearings on the issue.

Not only are global warming naysayers staring blindly in the face of the best available science, they are being reckless with our national security.

Political Note: Hate vs. Obama

With town halls turned violent and anti-Obama blogs on attack, I feel a need to speak (with evidence courtesy of Google search shown below) ...

The labels used to demonize Barack Obama over the past 18 months have been unrelenting and far more frequent than what has been leveled at any American President in my lifetime.

They include Obama as …

Black militant
Muslim
Arab
Terrorist
Anti-Semite
Anti-American
Racist
Foreigner
Anti-Christ
Nazi / Hitler
Nazi appeaser
Socialist
Communist / Stalin
Anarchist and Villain (Joker/Heath Ledger poster)

And these are just the portrayals covered by mainstream media. Others have not received primetime mention (like Obama as Satan).

American Presidents always draw harsh criticism and caricature.

But as shown in this chart of search results associating each of the past 4 presidents with a label, Obama’s association with negative portrayals far exceeds other recent Presidents (even with “Bush” essentially double counted by not distinguishing between the two Bush presidents).


The search structure was:

president + [name] + [label]



















When politics and polemics are stripped away, I would suggest that a single fact animates this anti-Obama phenomena … Obama is the first black President of the United States.

Aging Silos and Open Data

A new job often means big plans. So it is for the new Federal CTO, Aneesh Chopra. He's saying all the right things, but can he make all the right moves?

In his visit to Silicon Valley yesterday, Chopra called for the elimination of technology silos that litter the government landscape.

Good idea.

Focusing on IT, however, is less impactful than focusing on information. Tearing down data silos is more important -- for the public, the economy and improved government services.

The new federal IT dashboard showing tech spending by federal agencies is a nice start. The Office of Management and Budget (OMB) moved in a similar direction when it required all federal agencies to use the same open, standardized formats for financial reporting so spending under the Recovery Act can be displayed on Recovery.gov. Shining a light on how government spends our money is helpful.

But more must be done. Windows of transparency are nice. Access to actual data is better.

Government needs to open source its information, research and investment. Perhaps our new federal CTO and CIO should commit to opening up access to a different set of government data every week. The public can help. Create an online forum where people can suggest (and vote for) what information they want made publicly available.

Call it democratizing data. Or open sourcing data. Either way, there is a powerful magnifier effect to increasing public access to government data that will drive innovation and real economic opportunity, not to mention government transparency.

That is creative silo destruction we can believe in.

Mr. Obama, tear down these silos!


Categories: government, OpenStandards, innovation

FCC is Catching Up

The Federal Communications Commission (FCC) is working on the first national broadband plan for the U.S.

Better late than never.

During yesterday's stop on the FCC Summer Tour, its new chairman, Julius Genachowski, referred to broadband as this generation's highway system. They are ambitious words ... if not original.

The same exact point was made here over 3 years ago. Again, better late than never.

There is a major difference between our broadband highway and the asphalt highways built in the 1950s to connect America. Broadband is much more important to America's future.

Broadband does not to just connect our cities; it connects our lives. Broadband reaches into every house, every business, every hospital, every school and will power endless innovations that will re-shape our lives.

And a policy of net neutrality is vital for keeping these digital roads flat and fast-moving for everyone. Without it, broadband will turn into an endless series of toll roads on which those people and companies who buy the Easy Pass move fast while the rest crawl along in the right lane.

There won't be any Cash for Clunkers program if that happens.

Categories: netneutrality, broadband, FCC

Captain Cook Meet Global Warming

The great navigators of the Age of Explorers were a bit early in their quest to traverse the famed Northwest Passage linking the Atlantic and Pacific Oceans. What a difference 500 years makes. What a difference global warming makes.

For perhaps the first time in recorded human history, arctic ice around the North Pole has melted clearing not only a Northwest Passage but also a Northeast Passage.

The North-West Passage (circled left) and the North-East Passage (top right) are both clear of ice now, as shown in satellite photos.

It is an historic event.

But is the world without a North Pole a good thing? Shipping companies and ExxonMobil may love the idea. Climate change scientists are wary.



Polar bears are less enthusiastic, some now facing a 400-mile swim for survival.


And for the rest of us? Is this really such good news?

Categories: GlobalWarming

Software Patents: Innovation's Quicksand

Eric Maskin is no fan of software patents, and people should pay attention.

Professor Maskin is no technology flower child pushing P2P with his LSD. This Harvard and MIT economist just won the Nobel Prize in economics for his work on mechanism design theory. In 1999, he turned his economic eye to the value of software patents. And found them wanting.

His research showed that when patent protections for software strengthened during the 1980s, "far from unleashing a flurry of new innovative activity, these stronger property rights ushered in a period of stagnant, if not declining, R&D among those industries and firms that patented most."

Strong patent protection produced less R&D spending, and slowed productivity growth.

Why?

Technology is an industry of sequential innovation, with advancements built on the preceding invention of others. Imitation breeds innovation. In software, copying ideas and concepts is vital for innovation. Hence, the genius of open source as a software development model -- few barriers to the use of other people's concepts and code.

In dynamic industries like software, patents constrict innovation.

This relates to a larger enemy of innovation that I have blogged about -- content scarcity.

Maybe it is time to stop applying 19th Century rules on intellectual property to post-industrial areas that have an entirely different economic mechanics?


Categories: innovation, software, IP

An Inconvenient Nobel Prize

Al Gore, modern day prophet, has just won the Nobel Peace Prize for his efforts to raise social and political awareness of the dangers of global warming. Gore shares the Prize the U.N.'s Intergovernmental Panel on Climate Change.

Propelled by the movie "An Inconvenient Truth," Gore has toured the world delivering his PowerPoint pitch on the risks of man-made climate change. The film won an Academy Award. The man is now a Nobel laureate.

The best thing that ever happened to Al Gore was being defrauded in the 2000 election.

Of course, George Bush, the court-appointed winner of that election, is likely too thick to recognize that this year's Peace Prize is a direct retort to his empty, oil-infused rhetoric on climate change and energy policy. Bush rejected the Kyoto Protocol early in his presidency and has spent the intervening years doing nothing to break the US's "oil addiction" as he called it. Empty words.

Some may question the connection between global warming and peace. It is a short-sighted protest. It is not hard to imagine how severe climate change--bringing the loss of drinkable fresh water, massive flooding, refugees and ruined agricultural lands--could spark major conflicts as people become more desperate to avoid its impact.

Gore will no doubt reject the temptation to run for President this year, despite the efforts of draftGore.com. And why should he? He's on a roll, and the rest of the world beyond 1600 Pennsylvania Avenue knows it.

Categories: GlobalWarming, AlGore

GSA "FEMAs" California

Life on the Internet can be fragile, as California learned yesterday. While taking counter-measures against a hacker re-directing traffic from a state county's website to a porn website, the U.S. General Services Administration deleted California - virtually.

For seven hours, the entire ".ca" domain -- home to every government agency in California -- was gone. A flick of a a switch and ... No web access. No email. No California.

It started with the discovery that the website for Transportation Authority of Marin Country was hacked, and all traffic we sent to pornographic websites. The fear that its DNS server had been compromised, and could thus compromise the entire ".ca" domain apparently led the GSA to make California disappear entirely -- or more technically de-list ".ca" making it in accessible from servers worldwide.

As more public services become web-delivered, the need for reliable 24/7 access is obvious. Maybe a little more attention needs to be paid to disaster recovery by governments as they pursue e-government.

Who needs an earthquake when you have GSA? Maybe we should get FEMA to take over the ".gov" domain management.

Open Source Gets Himalayan High

It is a rare day when I can mention open source and Bhutan in the same sentence. The beautiful, tiny, mountain kingdom is far from a hotbed of technology innovation. Or is it?

Bhutan represents a great example of the power of open source. Too small to get its language supported in Microsoft products, open source allows Bhutan to help itself. The result ...

Dzongkha Linux (Pronounced like "Zonka"). Its release by the country's Department of Information and Technology demonstrates what open source--and only $80,000--can do.

Developed in 13 months, Dzongkha Linux is bootable on both Mac and Windows systems It is also bilingual, supporting both English and the Dzongkha language for word processing, spreadsheets, PowerPoint, web browsing, even chat. And Bhutan is not done yet. Next they plan to develop local language based, speech recognition and text-to-speech functionality.

All that innovation for an $80,000 investment. Now that is a major return on investment, courtesy of open source.

Categories: Bhutan, opensource