The high hopes that News Corp. had for MySpace when it paid $580 million in for the social networking site in 2005 have never been realized and appear more elusive than ever.
Consequently, MySpace co-founders Chris DeWolfe (who is CEO) and Tom Anderson (who is President) are being pushed out of their management roles in major shakeup of the company's leadership.
The move is signals News Corp’s concern over the site’s declining market share and poor returns.
In the past three years Facebook has surpassed MySpace in total number of users worldwide, but MySpace has managed to remain the largest site in the U.S. and has 130 million users globally.
In 2008 the company had estimated advertising revues of $585 million, with the bulk coming from its ad-sharing deal with Google. But it will take a long, long time for News Corp. to recoup its investment at that pace. That revenue problem is compounded because Google has been unhappy with its MySpace deal and is unlikely to continue it at present terms when it expires next year.
The shakeup at MySpace underscores the value creation challenges that online media face. Services are typically offered free to generate high numbers of users and then these are used to create audiences for advertising or as a market for up-selling enhanced services. Although the audiences are attractive for some advertisers and some types of advertising, online advertising is not yet as effective as television and print advertising for most brands and retailers.
Wednesday, April 22, 2009
DOES ONLINE NEWS STILL NEED OFFLINE TIES?
When the Seattle Post-Intelligencer ceased publication in mid-March it continued www.seattlepi.com as a web-only publication. It employs 20 persons, making it one of the largest online staffs of any local Internet news organization.
Although it has a much smaller staff than the print edition did, the site continues to cover local news and sports, provides national and international feeds, and features local bloggers. In many ways it is what many observers have called the future of post-print journalism. It is well recognized that print is an expensive way to convey news, information, and commentary so observers argue that the Internet is the answer for community informational needs because the public is increasingly getting their news there anyway.
It is still early days for forming a definitive view of how dropping print may affect online demand, but the P-I’s situation gives a unique opportunity to observe effects. In February—before the print edition closed—the website had 1.8 million unique visitors. In March, that number dropped to 1.4 million unique visitors. If these initial results hold true over time, it would indicate that print still provides some important reputational and marketing benefits to online activities.
Those interested in the online future of journalism should be watching the Seattle situation with interest in the coming year.
Although it has a much smaller staff than the print edition did, the site continues to cover local news and sports, provides national and international feeds, and features local bloggers. In many ways it is what many observers have called the future of post-print journalism. It is well recognized that print is an expensive way to convey news, information, and commentary so observers argue that the Internet is the answer for community informational needs because the public is increasingly getting their news there anyway.
It is still early days for forming a definitive view of how dropping print may affect online demand, but the P-I’s situation gives a unique opportunity to observe effects. In February—before the print edition closed—the website had 1.8 million unique visitors. In March, that number dropped to 1.4 million unique visitors. If these initial results hold true over time, it would indicate that print still provides some important reputational and marketing benefits to online activities.
Those interested in the online future of journalism should be watching the Seattle situation with interest in the coming year.
Tuesday, April 21, 2009
The Business: April 22nd
Sean Keane returns to The Business. Please come witness this amazing spectacle of mother natures richest pageantry, and BYOB.
The Business: April 15th
Sean Keane will not be with us on April 15th, but in his place will be:
Special guest for April 15: NATO GREEN!
Nato Green continues the great tradition of smart, biting, Jewish comedians like Lenny Bruce, Mort Sahl, and Joe Lieberman. Nato is the mastermind of Iron Comic, Laugh Out the Vote, Laughing Liberally Local 415, and the New Jew Revue. He's appeared in the Progressive Reading Series and SF Sketchfest 2008.
Special guest for April 15: NATO GREEN!
Nato Green continues the great tradition of smart, biting, Jewish comedians like Lenny Bruce, Mort Sahl, and Joe Lieberman. Nato is the mastermind of Iron Comic, Laugh Out the Vote, Laughing Liberally Local 415, and the New Jew Revue. He's appeared in the Progressive Reading Series and SF Sketchfest 2008.
Thursday, April 16, 2009
THE WILD AND WOOLLY WORLD OF CABLE, SATELLITE AND BROADBAND MARKETING
Increasing competition among cable, satellite, and broadband suppliers, combined with slower growth in consumer uptake because the industries have reached maturity, is leading to aggressive marketing efforts to wrestle market share from other companies.
If the leading companies followed classic marketing strategies, they would be offering consumers better arrays of networks and services, better customer service, and/or better prices in efforts to attract more customers.
Instead, many of the largest competitors have been engaging in acts that harm customers and consumers by using illegal and deceptive marketing practices and strategies designed to unwittingly wring greater revenue from their customers. Although the companies apparently think there are benefits in behaving badly, their marketing practices are increasingly getting them into trouble.
Aggressive telemarketing—which has always offended consumers—has landed a number of leading firms in hot water. Comcast and Direct TV have just admitted charges and are paying fines to the Federal Trade Commission for violating telemarketing rules by ignoring the federal do-not-call list. The FTC has also filed a suit against Dish Networks for similar violations.
Companies tend to advertise heavily when competition is high and ads for cable, satellite, and broadband services have helped the revenues of thousands of television stations, newspapers, and magazines across the U.S. Unfortunately, the veracity of advertising claims in cable, satellite, and broadband services has been widely questioned by consumer groups, governments, and other competitors. In recent months Bright House Networks filed a complaint with the Federal Communications Commission about the practices of AT&T, the National Advertising Division of the Council of Better Business Bureau chastised Cablevision for advertising claims after complaints from Verizon, and Verizon itself has been sued for misleading claims by NJ Division of Consumer Affairs.
The industry also sought to market different levels of broadband Internet services to customers and planned to charge different rates for users—a strategy that would allow them to advertise a low price even when many customers would have to pay a higher price based on usage. Plans by Time Warner, Comcast, Frontier Communications and other firms to offer tiered service plans have now been dropped after complaints by customers and legislators.
Cable and satellite firms have traditionally been mavericks and rogues in the media industries and many Internet service firms followed their example. Even though the industries have matured and the number of players has been significantly reduced through mergers and acquisitions, the wild and woolly world they created is still evident in their marketing practices.
We can only hope they will learn to become good corporate citizens—or at least firms concerned about their own reputations.
If the leading companies followed classic marketing strategies, they would be offering consumers better arrays of networks and services, better customer service, and/or better prices in efforts to attract more customers.
Instead, many of the largest competitors have been engaging in acts that harm customers and consumers by using illegal and deceptive marketing practices and strategies designed to unwittingly wring greater revenue from their customers. Although the companies apparently think there are benefits in behaving badly, their marketing practices are increasingly getting them into trouble.
Aggressive telemarketing—which has always offended consumers—has landed a number of leading firms in hot water. Comcast and Direct TV have just admitted charges and are paying fines to the Federal Trade Commission for violating telemarketing rules by ignoring the federal do-not-call list. The FTC has also filed a suit against Dish Networks for similar violations.
Companies tend to advertise heavily when competition is high and ads for cable, satellite, and broadband services have helped the revenues of thousands of television stations, newspapers, and magazines across the U.S. Unfortunately, the veracity of advertising claims in cable, satellite, and broadband services has been widely questioned by consumer groups, governments, and other competitors. In recent months Bright House Networks filed a complaint with the Federal Communications Commission about the practices of AT&T, the National Advertising Division of the Council of Better Business Bureau chastised Cablevision for advertising claims after complaints from Verizon, and Verizon itself has been sued for misleading claims by NJ Division of Consumer Affairs.
The industry also sought to market different levels of broadband Internet services to customers and planned to charge different rates for users—a strategy that would allow them to advertise a low price even when many customers would have to pay a higher price based on usage. Plans by Time Warner, Comcast, Frontier Communications and other firms to offer tiered service plans have now been dropped after complaints by customers and legislators.
Cable and satellite firms have traditionally been mavericks and rogues in the media industries and many Internet service firms followed their example. Even though the industries have matured and the number of players has been significantly reduced through mergers and acquisitions, the wild and woolly world they created is still evident in their marketing practices.
We can only hope they will learn to become good corporate citizens—or at least firms concerned about their own reputations.
Saturday, April 11, 2009
TECHNOLOGY RESTORES COLLECTIVE CONTEMPLATION
Humans are social and tribal animals and we have always collectively contemplated the meaning and potential responses to issues and events. In the past tribes gathered around fires and villagers gathered in taverns, cafes, and community halls to consider contemporary developments.
Individual engagement and participation in discussion were the norm, with some reliance on leaders and those who held the history and wisdom of the community.
Lifestyle changes in the 19th and 20th century society created mass society and reduced time and opportunities for collective contemplation. It was replaced by a form of representative contemplation and a greater reliance on expert and professional commentators. The effect was primarily to produce communications telling members of communities what to think and do.
Contemporary communication technologies are dramatically altering that situation and supporting a return to collective contemplation. While not producing face-to-face discussion, blogs and technology-assisted social networking have increased opportunities for discussion and interaction. Individuals are gaining greater opportunities to share their opinions and views, to inform each other, and to respond to and engage in conversation that has been impossible for many years.
Concurrently, technologies are beginning to allow effective meta analyses of buzz, blogs and social networking that gather topics and some sense of opinions being expressed. These information technologies allow us to aggregate the views of millions in ways not previously possible.
Where such technologies will take us in unclear, but the contemporary engagement and contemplation by millions of people online is far better for society than the disenfranchisement that mass society previously encouraged.
Media organizations will have to wrestle with how this collective contemplation is altering the roles and functions of editorial writers, op-ed authors, and columnists. They will have to increasingly engage with the public and see their roles as provoking conversation, not merely telling people what to think.
Individual engagement and participation in discussion were the norm, with some reliance on leaders and those who held the history and wisdom of the community.
Lifestyle changes in the 19th and 20th century society created mass society and reduced time and opportunities for collective contemplation. It was replaced by a form of representative contemplation and a greater reliance on expert and professional commentators. The effect was primarily to produce communications telling members of communities what to think and do.
Contemporary communication technologies are dramatically altering that situation and supporting a return to collective contemplation. While not producing face-to-face discussion, blogs and technology-assisted social networking have increased opportunities for discussion and interaction. Individuals are gaining greater opportunities to share their opinions and views, to inform each other, and to respond to and engage in conversation that has been impossible for many years.
Concurrently, technologies are beginning to allow effective meta analyses of buzz, blogs and social networking that gather topics and some sense of opinions being expressed. These information technologies allow us to aggregate the views of millions in ways not previously possible.
Where such technologies will take us in unclear, but the contemporary engagement and contemplation by millions of people online is far better for society than the disenfranchisement that mass society previously encouraged.
Media organizations will have to wrestle with how this collective contemplation is altering the roles and functions of editorial writers, op-ed authors, and columnists. They will have to increasingly engage with the public and see their roles as provoking conversation, not merely telling people what to think.
Saturday, March 28, 2009
EVERYONE'S NOT ATWITTER
Journalists and technology writers are enamored with communications technology and tend to portray successful technologies as representing large scale trends. We are regularly presented with news stories and promotional materials about the rise of new technologies and about how their uses create social trend that are significantly altering society.
The release of the new iPhone was recently featured on network evening news, Blackberry has been heavily discussed because its use by Pres. Obama, and Twitter has been featured in numerous television and newspaper stories. The impression given by coverage is that anyone who doesn’t have an iPhone or Blackberry and anyone who doesn’t Twitter is out of touch with the mainstream and being left out of modern society.
These new means of communications offer interesting possibilities, but their consumption needs to be seen realistically. Blackberry, for example, has 14 million subscribers-- about 5 percent of all mobile phone users in the US. iPhones represents about 1 percent of mobile phone users. The number of Twitter users is currently around 1 million, representing only about 3 tenths of 1 percent of the US population.
Certainly those kinds of numbers can create businesses successes for their firms, but we have to be realistic in interpreting their overall impact on technology markets, social interaction, and diffusion of technologies. Not everyone wants to or will be equally wired, communicating, or sharing mundane details of their lives with their friends and the world. Some persons will find communications enabling technologies more rewarding in business and personal terms than other persons.
It is easy to forget the size of market when discussing the impact of diffusion of technologies. Without doing so, however, one gets a warped sense of their role in contemporary life.
The release of the new iPhone was recently featured on network evening news, Blackberry has been heavily discussed because its use by Pres. Obama, and Twitter has been featured in numerous television and newspaper stories. The impression given by coverage is that anyone who doesn’t have an iPhone or Blackberry and anyone who doesn’t Twitter is out of touch with the mainstream and being left out of modern society.
These new means of communications offer interesting possibilities, but their consumption needs to be seen realistically. Blackberry, for example, has 14 million subscribers-- about 5 percent of all mobile phone users in the US. iPhones represents about 1 percent of mobile phone users. The number of Twitter users is currently around 1 million, representing only about 3 tenths of 1 percent of the US population.
Certainly those kinds of numbers can create businesses successes for their firms, but we have to be realistic in interpreting their overall impact on technology markets, social interaction, and diffusion of technologies. Not everyone wants to or will be equally wired, communicating, or sharing mundane details of their lives with their friends and the world. Some persons will find communications enabling technologies more rewarding in business and personal terms than other persons.
It is easy to forget the size of market when discussing the impact of diffusion of technologies. Without doing so, however, one gets a warped sense of their role in contemporary life.
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