Saturday, April 14, 2007

Google-Doubleclick deal: Things we learnt

What Google really bought
With this deal, Google has bought wholesale relationships. Phil Wainewright says it right,
‘the most important asset DoubleClick possesses is its relationships with publishers and advertisers’.

What is Google’s aim?
Be the biggest ad broker in the world.

Size of online advertising market: $17 billion a year
Google’s 2006 revenue: $11 billion (mostly text ads)

Recently, Google announced that that it was extending its Adwords marketplace on TV.

Google’s competition: Yahoo, Microsoft’s MSN

Google’s Current Market Cap. and Cash position
As of Dec. 31, 2006, Google’s market capitalization stood at $145 billion and had $11.2 billion in cash and marketable securities.

About Doubleclick
New York-based company in the business of placing banner ads on websites. Founded in 1996, it was taken private in 2005 by Hellman & Friedman and JMI Equity for $1.1 billion.

Doubleclick’s revenues
According to New York Times, revenues are about $300 million a year.

By paying $3.1 billion in cash, Google paid 10 times revenue for Doubleclick, which some say is a healthy buy of a mature company.

DoubleClick’s clients

Sports Illustrated
Meredith Corp.

DoubleClick earlier announced that it is going to set up “a NASDAQ-like exchange for the buying and selling of digital advertisements”

Why did Google pay in Cash this time?
A. Lured in by Microsoft this time around?
A comment on Slashdot says that ‘Microsoft wasn't that interested in DoubleClick…they wanted to make damn sure that Google overpaid for it.’

B. Too many Google shares in the market, which was not helping Google’s stock price.

Kevin Kelleher writes that while Google’s share price has risen by just 1.5%, as of April 12, this year, the S&P 500 index, which Google joined a year ago, has given returns of 16.5% in 2006 and is up 2.1% in 2007. Google’s stock rose by only 11.0% to $460.48.

Reasons for glut of Google shares
1. Google’s secondary stock offering in September 2005 added 14.2 million shares to the 19.6 million already in the market

2. Google paid for its earlier $1.65 billion Youtube acquisition in stocks, by issuing another 3.2 million shares and paying only $15 million in cash.

3. A larger number of Google employees are exercising stock options.

What do detractors of the Deal say?
1. Google may have paid a bit too much.
2. This is a bubble.
3. Banner ads is ‘so last century’. (Phil Wainewrigt)
4. PPA (Pay per Action) will be real thing.
5. Clash with existing partnership deals with web sites.
6. Since Adserving is a commodity business, with charges as low as $.02 cpms, some say Google could easily have developed a better Adserver product inhouse which would not put any dent to its cash position. Moreover, Google could offered it for free if a website publisher accepted the Google adsense program to run on any remaining inventory. It would have been ‘disruptive’.

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Friday, April 13, 2007

Social networks and changing demograhies

Rolling Stone will surely be one of the first mainstream magazines entering into the social networking field.

Although, the venerable publishing brand will be aiming for a younger online crowd, hoping to capture some of the appeal of Pitchforkmedia and like, Andrea Feckzo is correct in guessing that most readers of the magazine are 30 and above. It wouldn’t be silly to be inadvertently building a social networking site for an older user base.

Comscore analysis shows that,
- More than half of Myspace visitors are now 35 and older.
- 71% of the Friendster’s 1 million user base is 35 and above.
- 50% of Facebook users are 25-plus, despite that it has now almost become mandatory for new college and high school students to register there.

Aiming an ageing demographic is a smart idea. They have the buying power and staying power, vis-à-vis the fickle younger crowd.

Adult-oriented social networking sites are already up and running, Multiply for example.

Next up: A social network from Esquire and New Yorker magazines, perhaps?

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Thursday, April 12, 2007

Do we really need blogs?

Forums, Youtube videos, Video blogs, podcasts, Wikis, new things such as Twitter and Tumblr, SMS/Texting and social network sites: Facebook, Orkut, Myspace, Yahoo Answers and others.

When you look at the amount of activity in this “Live/Always On” web, you tend to take a fresh look at the blogging phenomenon, which is in its 10th year.

The reason why I ask whether we need blogs is that if your blog does not make much headway, it remains a desperate (and proud) personal outpost flying your flag in the swirling ocean of of humanity.

Looking at other available tools, you begin to think whether blogging is really for you.

You find yourself asking, “Aren’t I better off using other tools?

1. Talking with people who share my beliefs and likings in social networks.
2. Asking questions and for help in appropriate forums.
3. If I wanted to waste some free time, chatting on my mobile phone, twittering my latest activity, looking at photos and videos on Orkut.
4. If I was into news, I might make better friends than the occasional commenter on my blog, when I commented often on Digg and Reddit.
5. Going further, I might use that cultivated friendship for business purposes, especially if I frequented Ryze or LinkedIn.

The Blog becomes a sideshow in this alternate scenario.

What about people who are out to make a money using blogging?
How do you build a brand?
Do you have the resources to stay put for a long haul?

You have to fight the A-listers, Digg cabals, expensive SEO experts, free information on Wikipedia, the news websites, spam blogs (90% of existing blogs) etc for a good place in the search engines, for attention as well.

Vic Keegan has written a good article on the state of blogging in the Guardian.


Wednesday, April 11, 2007

Is Engadget really a blog?

99% of blogs are single-person affairs. Then you have multi-author blogs (, and finally the giant blogs who are magazines running on a blog platform.

Sites such as Engadget, Gizmodo, Joystiq and Treehugger have evolved from single-person blogs into giant magazines with monthly revenues in excess of half a million dollars.

Engadget sends big teams to cover industry events such as CES. Treehugger has a multinational appearance. These media properties are run like magazines – dozens of writers working for editors, departments and so on.

So, my question is:
What is a blog?
Is it just an easy to implement CMS with commenting?

Is blog just a tool? Leaving it to you to make something out of this tool: start a news business, a diary, a collection of links, etc.

If Engadget is not a blog, then one may call it an online technology news magazine that uses a Blog-like CMS (which is not relevant for readers, anyway).

Related links:

If you are paid to blog, you are not a blogger

Newslok Live


Tuesday, April 10, 2007

State of the web: same ol', same ol'

Same old big name brands who lord over most of everything.

Within a span of a week’s time, two reports came out: first, David Card from Jupiter Research wrote a paid report on portals of the 21st century and now iProspect has released a report (again in association with Jupiter Research) on how the U.S. online population uses popular social networking sites.

Both of the reports have few new things to say except who has the most market.

From David Card’s report:

1. Three companies account for 30 percent of time spent online, each with three times the market share of the next tier of competitors. And four companies control 55 percent of online ad dollars.

2. Social media and the re-birth (and re-invention) of online advertising are the most disruptive catalysts.

3. Next-generation portals built around communications and entertainment will offer promising opportunities.

4. Google and MySpace are best-positioned to disrupt the current online media industry structure.

5. Most other companies should not try to create general-purpose portals.

All of this well and fine and has been discussed in many places.

David is positive about Yahoo.
Yahoo is still the best-positioned company in online media to offer a combination of display advertising (including rich media, video, and behavioral targeting), sponsorships, and search.


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How bloggers are better than print media journalists

Nick Douglas says the same thing I have been saying for a while.
The Mainstream media’s coverage of technology borders on frivolity and sensationalism, often resorting to cheap headlines and easy-to-create lists.

He writes,
The articles are shit.

"Bad behavior in the blogosphere!" "How this kid made $60 million in 18 months!" "Web Celeb 25!" Wow, those headlines (from the Chron, BusinessWeek, and Forbes respectively) make more sense with the added exclamation marks. Switch the nouns and they'd all fit in the Enquirer.

Nick accuses print media journalists of three failings:

1. Being slow on the news. Bloggers are more closer to the facts.
2. Screwing up concepts (for example, calling the blogosphere an entity)
3. Not criticizing fellow journalists fro shortcomings, something bloggers love doing.

How are bloggers better?

I'm one of those jackasses who believes blogging is The Future Of Journalism. Not because we write any better (we're even worse) or because we're any more honest (we're liars). But there are enough of us to refute each other, point out the good bits, and throw the winners onto Digg.
I haven't read better words in support of blogging.


Lesson #1 for bloggers: Do not be too self-righteous

We bloggers are a curious breed. When a fellow blogger comes under personal attack from others, we jump to her defense in droves. However, bloggers also do not react lightly to other bloggers’ attempt to proclaim and carry the flag of righteousness.

At times, the so-called pioneer bloggers take themselves a bit too seriously.

Following the Kathy Sierra incident, Tim O’ Reilly proposed bloggers build a new code of ethics, which other bloggers would vote for and then display a badge on their web sites.

100% ethical, huh?

Imagine The New York Times, Economist, BBC and others propose a similar thing. It smacks of hypocrisy.
The big papers know that nobody is infallible.

Many A-list bloggers still are not ready to give up the control & influence they once had.

Who is to guarantee that a badge-owner will always stick to the ‘code’?
Moreover, would people stop reading blogs that won’t have the badge?

I am shaking in my boots.

Premier Media blogger Jeff Jarvis is not happy with it. Referring to a mainstream media outlet (NYT) quickly picking up a failing of new media, he angrily says:

How could it (The New York Times) pass up a juicy opportunity to make us all look like the louts they all too often think we are?

Geeks are Sexy have the best response to O’Reilly’s novel Pr exercise:
O’Reilly trademarks “Ethics 2.0″

(O’Reilly also coined the ‘Web 2.0’ term)

Eric Berlin is not happy with the so-called code calling for ‘turning off anonymous commenting’, rightly calling it ‘a fundamental right and privilege of every blogger to decide on his or her own’.

Eric has rounded up response from some big bloggers as well:

Mathew Ingram:
“I think codes of conduct should be a personal matter, rather than a quasi-legislated thing.”
Mike Arrington: “The code of conduct and the mass of bloggers lining up behind it scares me a lot more than the hate comments and death threats I’ve received in the past. I won’t support it.”
Tony Hung:
“Bloggers don’t need a code of conduct, because it isn’t the content of blogs that are in the question. What’s being called into question is the cowardly personal attacks that are sent by email, and left in the comments sections of blogs.”
Andy Beal:
“…any attempts to define or restrict blogging, will ultimately suck the life out of it, and kill much of the momentum we have going on.”
Even Robert Scoble who famously decided not to blog following the Kathy Sierra incident disagrees with O’Reilly:
“I do find disquieting the social pressure to get on board with this program.”

A Round up of existing codes for Bloggers
A quick search of Blogging codes on Google turns up the following:

Cyber Journalist’s code of ethics
Rebeccablood’s Weblog ethics
EFF: Legal Guide For Bloggers
A working blogger’s code

Leave self-righteousness to the those in religion and politics.

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Monday, April 09, 2007

State of Media according to man who published the Mohammad cartoons

Flemming Rose is the culture editor of Jyllands-Posten, the Danish newspaper that published the ‘infamous’ cartoons on the Prophet Mohammed.

It was Mr. Rose who commissioned the cartoons. About that, he says this:
what I wrote commissioning them was not, “Draw cartoons making fun of the prophet,” but “Draw Mohammad as you see him,” which is very neutral.

Elaborating on the topic, he says in a recent interview in CJR,
It is an act of love and inclusion to satirize people. There is some kind of recognition in that, to know you can laugh and make fun of one another.

Why did he did what he did

Mr. Rose claims he solicited the cartoons to assert freedom of speech.

He also wanted to fight against the self-censorship, something he says is ‘crippling the West’ when it comes to “accommodating Muslim sensitivities.”

On U.S. Media’s decision not publish the cartoons
He says he understands the Americans’ concerns as they have people living and working in many ‘sensitive’ parts of the world.

Dangerous ‘experts’
Mr. Rose says the media is making experts out of people just because they have a particular religious or political leaning.

Most importantly, Mr. Rose suggests we should explain from ‘where this person is speaking, if it’s an institution or university with a certain tradition or whatever’.

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Sunday, April 08, 2007

A cliffnotes on news 2.0 for Sam Zell

Sam Zell might have made his billions in the real estate business, he knows exactly what the RIAA people knew about the net, nothing.

He is making the same old useless tirade about the search engines stealing the papers’ content.

A quick primer for Mr. Zell:

1. The aggregators/news search engines do not carry ads.
2. The aggregators/news search engines help bring traffic to the news sites.
3. The aggregators/news search engines help readers make informed decisions by showing up a broad choice of headlines on a particular story. Why are you afraid when you can boast of quality. If you are not for quality or exclusiveness, how long do you thing you can survive in the news business?
4. There are a million (maybe more) news outlets in the online world. How do you guess readers will come to your site?
5. Every reader is also a news publisher.
6. Google does not make much money stealing others’ content. Maybe , he can start with reading this guide from Seomoz.

Update (10/4/2207)

Donna Bogatin writes that Google News is NOT newspaper driven, meaning its core business is search.

I forgot to mention that Google news also includes blogs and other small news sites, which are thankful for the traffic.

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Downside of the A-list phenomenon: link baiting is easy

This weekend, it was Paul Graham’s turn to resort to linkbaiting.

He writes that Microsoft is dead. Reasons: techies don’t use MS as much as before, Google is winning the online battle, and so on.

That is okay for Paul to write, as he writes for a particular type of audience – geeky, startup-oriented, who love to give the finger to the goliaths of the day.

Don Dodge quickly puts things in perspective when he asks, ‘Since when does growing $4 Billion a year = Dead?’.

Already many including those working with Microsoft understand Microsoft is a middle-aged, gracefully plateauing company that was once king.

What goes around comes around. Dave Winer puts it right when he says ‘What's happening with MS is not death, but being pulled back to earth by gravity. It's the cycle of tech companies

Microsoft will not be worried by Paul Graham’s article.

Microsoft is in all probability aiming for that fickle, ‘oh so cocky’ market’. It is after the low-bro market – the governments, the Fortune 500/1000/whatever organizations who still think the CIO is God and the harassed consumer who easily succumbs to the retailer’s pressure to go in for a fully loaded PC – easy money for the taking.

Therefore, here is a thought:
The downside of the A-list economy, perpetuated by the likes of Techmeme, Digg and others, is that people on the list have the liberty to make cute headlines without lifting the little finger.

As an A-list, you are allowed to be confrontational (Calacanis’ anti-SEO rant), pouting (Scoble’s choice not blog after the Kathy Sierra incident), falsely sentimental (Om Malik’s Web 2.0 innocence post)….at the other end is Time magazine which proclaim 2006 to be the year of YOU.

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