Newssift Technical Plumbing
March 23, 2009
Thanks to the readers who sent me information about the new “test version” of the Financial Times’s news service. I hope it revives the Financial Times as an online financial news source. I know that the FT has a solid brand and great potential.
Some of the information about vendors pointed back to TechCrunch; other readers just made statements which I will pass along for additional comment / correction. Here’s the line up:
- Endeca–the guided navigation company
- Nstein–content management (started life as a content processing company but changed and now reports record revenues)
- Lexalytics–the new entity formed with the merger / fusion of Lexalytics (sentiment analysis) and Infonic (information management)
- ReelTwo–search, data analysis, and “custom portals”.
My take on this use of multiple technologies:
First, the Financial Times’s beta makes clear that no single search and content processing system can meet the needs of a client like the Financial Times.
Second, the Financial Times implemented a try try try strategy before taking a clear sheet of paper and figuring out how to make its content more accessible to its target user group. I don’t think I can estimate the cost of the present system because it makes clear that earlier efforts at search failed. Those “sunk” and “opportunity” costs are wiped away, but a full accounting of the total cost of making FT information available to its users is more than today’s chief financial officer wants to put on his / her books for an ROI calculation. The same multi year investment in search plagues another European publishing company as well. The problem is not unique to the FT, and that’s important. The shift from traditional publishing business models and methods to Internet models is neither easy nor obvious.
The main FT.com splash page with a welcome screen that obscures the news I wanted to view.
Third, who is the intended user? The site offers a number of powerful functions. The folks who want these types of online operations may already have them available without charge from such places as http://finance.google.com, http://finance.yahoo.com, or (hold your breath) American Online here. As a side note, the AOL service (linked to via Google Finance) runs on the potent Relegence platform here.
The America Online splash page for business and financial information. Note: the information is not obscured by a pop up greeting. Remember. This is the deeply challenged America Online and it is handling business information with its own technology, not a collection of four discrete systems.
Fourth, I think the FT is late to the party. Maybe too late? The company has knuckled down to create Newssift, but the window of time for making big traffic gains has closed. Financial information and analytic tools are available to investors with online brokers such as Fidelity and TDWaterhouse. Business news is available from high traffic outfits like Yahoo News and lower profile services such as Newsflashr.
Fifth, one wonders if the price tag for integrating the various technologies has been tallied. What happens when one of the three or four vendors makes a change? I don’t have sufficient data to estimate these costs. Perhaps the costs are trivial? Somehow I doubt it.
In short, the FT is trying again. Like other companies shifting from dead tree business models to the crunchier online variety of business model, the timing is not optimal. I wish the FT and its vendors good luck and fair weather. My weather charts predict stormy seas ahead followed by a flood of red ink rushing from different points on the compass.
Stephen Arnold, March 23, 2009
Search in the Cloud… Get a Snack, Take a Nap
March 23, 2009
Very interesting table of content delivery network latency here. There are some surprises in Mudy’s Blog. For example, the two fastest CDNs were Akamai and AOL. Yep, AOL. Amazon, in the middle of the pack, aced Google’s Home Page, Google’s Ajax Library, and Google’s App Engine. No data for Azure, Microsoft’s cloud beta. What’s this mean for search enabled applications? My hunch is that latency will boost snack sales and reduce users’ sleep deficit.
Stephen Arnold, March 25, 2009
Online Advertising: Cruisin for a Bruisin Says Wharton Prof
March 22, 2009
A happy quack to the reader who went me a link to the guest write up called “Why Advertising Is Failing On The Internet” by Wharton professor Eric Clemons. You can read his dense, interesting exegesis here. His bio is here. If you are not familiar with the context of a business education at Wharton, you may find this 2005 article interesting as well.
Dr. Clemons argues:
My basic premise is that the internet is not replacing advertising but shattering it, and all the king’s horses, all the king’s men, and all the creative talent of Madison Avenue cannot put it together again.
His analysis touches on a number of issues. The one of interest to me was his discussion of monetization options. Three of his points jumped at me. I am not comfortable quoting a large chunk of his text. I will, therefore, reference three points and urge you to read his discussion of each. The three points were:
- Content providers can charge for information
- A Web site can sell “experience and participation” in a virtual community
- Developers can sell “accessories for virtual communities”.
Instead of delivering advertisements, other monetization options exist.
I understand his arguments. I do not have a degree from a business school. I admit that I am not very good in business; otherwise, why would I be writing a free Web log, using the persona of an addled goose, and living next to a mine run off pond in rural Kentucky?
My observations:
- Monetizing online information is quite difficult. It is easy to get some money. It is tough to get lots of money. There are exceptions, and these dynamics need close scrutiny. Since the late 1960s, many executives have tried to create an online revenue stream that covers costs, pleases stakeholders, and leaves customers happy. Few have pulled this off. In my experience, subscriptions can work. I am not as confident that selling participation and accessories for a virtual community will do the job.
- Advertising in print is old, well understood, and appropriate for mass markets. These markets exist but are no longer organized by the traditional media companies. As a result, traditional business analyses don’t work. The reality of the present online sector is that advertising works from Googzilla and to a lesser extent for other companies. In the present online world, the cost of infrastructure means that in addition to technical savvy and a good idea, quite a bit of cash is needed.
- Consumers of online information have made it clear to me that free beats for fee any day. As the economic noose tightens, the demand for subsidized information access will increase. When money is tight, clever people will find ways to obtain access to high value content. I think the threat of peer to peer data transfer is significant, but I am not sure that short of a UK or Australia style data filtering program, peer to peer transfers of high value content can be stopped. The evil doers are probably the children of lawyers, publishers, and academics.
In the back of my mind is a small voice reminding me that the present economic crisis, Enron, Tyco, and some other interesting events were a result of MBA think. I would, therefore, suggest you follow my standard practice of keeping a salt shaker handy when pondering MBA type pronouncements. I worked at Booz, Allen & Hamilton in its salad days, and I experienced first hand when reasoned arguments don’t work in the real world.
Advertising online sort of works. Will it fail? Sure, but I think it has some legs. What’s the option? A local newspaper. Late night cable TV pushing Sham Wow? Snail mail letters with business reply cards? Broadcast radio spots? Door knob hangers with free samples? Product placements in motion pictures that go direct to DVD and then to non US distribution channels?
And, there is the issue of Google. I don’t think the company will shrivel like the Seattle Post Intelligencer, the Financial Times, the New York Times, or the Hearst papers. Google is not selling its assets to pay its debt; the New York Times is and the Boston Red Sox share too boot. I am just an addled goose, delighted to know that I can build a business selling virtual accessories. I always wanted a pair of virtual Web feet.
Stephen Arnold, March 22, 2009
Internet People Versus Content People
March 22, 2009
I enjoyed Mark Cuban’s “Why Do Internet People Think Content People Are Stupid?” here. To be fair, I also like Boxee’s CEO (Avner Ronen) and his compatriots view of content people. The trigger for this dust up is Hulu’s decision to block the Boxee service from Hulu content. You can get a refresher on this issue in Peter Kafka’s “Boxee CEO Avner Ronen Gets a Crash Course in the TV Business” here.
Mr. Cuban’s article sets the stage for the battle. He wrote:
…it would make absolutely zero sense for legit content providers to compete with the most consistent and largest source of revenue they have.
He is correct. In my opinion, his key point was:
If al a Carte is the way of the future, then it should apply to the Internet as well, right ?No one wants to pay the cost of the Web sites they don’t use, or the bandwidth they don’t consume, right ? Bring on Al a carte Internet. Make those who want 1mm Web sites available pay for it !
I can understand his argument, and it makes sense to those with a good understanding of the traditional media businesses and their methods.
Is the Boxee CEO wrong? I can understand his viewpoint because he like many other companies innovating in the datasphere come at content from a different angle. Mr. Ronen’s arguments make sense, particularly to those comfortable with the current digital information environment.
The challenge is time. The content people have to win over those who support the “Internet people” side of the argument. Time is running out because traditional media and some content people are marginalizing newspapers. I am not sure if the people who rely on YouTube.com or even Hulu.com will be subject to behavior modification. I run into more Internet people today than I did two years ago. I also don’t run into as many content people today as I did a couple of years ago.
I write for some traditional publishers, and I know that money is tight. Subscribers are drifting away. The managers are entertaining advertorials, inserts, and massive award programs to create revenue opportunities. None of these is what my former employer Barry Bingham Jr. would have called “content.”
Both sides of this argument are valid. In the present economic climate, this battle will be won by those younger than me moving through their careers. I don’t think the traditional media business models will have much traction unless significant, compelling progress is made quickly.
I remember when I got my first transistor radio when I was in grade school in the late 1950s. My mother asked, “Why do you want to carry a radio around with you?” I recall clearly that I was able to listen to the radio at night via an earphone. When I had to clean up the garage, I could tune my radio to a station playing rock and roll. I understood the convenience and discovered new uses for that aqua and white museum piece.
My generation set the stage for the Walkman, then the iPod. But those younger than me cannot envision a world without an iPhone and pervasive connectivity. My mother (may she rest in peace) clearly articulated her generation’s view of a portable radio. Now the clunker radio I had is a museum piece or a collectors’ item.
My hunch is that the business models that made broadcast radio work in the 1950s is destined for the same fate. Time is indeed running out. I don’t think there’s much doubt in my mind about which competitor will win. The question is, “When?”
For content people, their enemy is their own children. That’s what makes this battle interesting. King Lear writ in binary. Remember how that turned out?
Stephen Arnold, March 22, 2009
Netbase: Relaunches Content Intelligence Platform
March 22, 2009
Netbase (Research Smarter, Faster) at http://www.netbase.com/ is relaunching its Content Intelligence search platform. You could only get it through illumin8, http://www.illumin8.com/overview_whatis.php, a semantic search tool currently used by large R&D corporations, but Netbase is expanding its focus and marketing.
Netbase’s description: “Netbase Research Engine uses state-of-the-art text analytics technology to search, extract and summarize information with rich interrelationships from billions of business-relevant web sites and scientific documents.” illumin8 was specifically designed to help knowledge workers with their technology data and knowledge searches. Now it’s expanding from that highly specialized R&D focus to include other business such as market research, company news, and government and military concerns. This all means the search platform will now be available to more interested customers than big research giants like P&G or 3M.
Jessica W. Bratcher, March 22, 2009
More Twitter Love
March 22, 2009
The Twitterphobic will want to click elsewhere now. I quite liked “Twitter, the Most Important Web Site Since Google” by Chris Bennett. You Twitter lovers will want to click here to read the original. The core of the write up is that Twitter is a big deal for certain types of content. I agree. For me, the most interesting comment in the article was:
Social media and blogging in the large corporate space has always been hindered by Red Tape, Twitter forces companies to break that Red Tape. Large companies put review and approval processes before publishing blogs, can you imagine if tweets had to go through legal first? Not going to happen, Twitter forces companies to put someone capable and trusted at the helm as it cannot be regulated it like other mediums.
Worth reading.
Stephen Arnold, March 22, 2009
Non Profit News Reports about For Fee News
March 22, 2009
I read this National Public Radio story and experienced a mental dislocation. I don’t know much about NPR except that it runs really annoying fund raising events and sells ads to outfits who provide $100 DVDs to some folks. NPR has struggled when it received US government funding, and it continues to arm wrestle with accountants since it became whatever it is today.
The article that jarred me was “Newspapers Wade Into An Online-Only Future” by David Folkenflik. You must read it here unless you heard it on NPR, an activity that seems to be losing traction here in the Harrod’s Creek mine run off pond.
The story reported that newspapers have some problems with their centuries old business model. Newsprint, inks, union contracts, disinterested customers, and vanished advertisers–you know the litany of woes.
For me the most interesting comment was:
The online-only plan for newspapers remains an unproven financial model; there are great savings by scrapping printing and delivery costs, but even greater lost revenues, since advertisers pay far more money for print ads than online ads.
I relished the term “unproven.” I think it is the wrong term, and I think that any newspaper looking for online riches by charging for news that I can get on Twitter or a Web log is out of step with the young at heart.
These issues are small pommes frites, however. The real issue for me is that failing subsidized news outfits are writing about failing traditional print news outfits.
Now that’s a solid foundation for analyzing and resolving some fundamental problems in online.
Maybe the Beyond Search team will Tweet this post as an example of irony as the US embraces the consequences of the financial tailspin now underway.
Stephen Arnold, March 22, 2009
Catfish Smokes Microsoft
March 21, 2009
Wow, the blogosphere is showing some moxie. Catfish Comstock’s analysis of the Microsoft Web search situation is devastating in my opinion. You can find the article “MSN Search Out of Touch” here. Among the points Mr. Comstock jabbed into the hide of Microsoft were:
- Google’s an experimenter
- Microsoft’s approach to search makes it easier to spoof Redmond’s engine
- Microsoft should buy Twitter so the company has a property that people care about.
I can remember when it was downright risky to criticize Microsoft. Times have indeed changed. This catfish bites.
Stephen Arnold, March 21, 2009
Google Losing Its Cool
March 21, 2009
Not my phrase. This wordsmithing appeared in the Gawker story “Google’s Data Fetish Drives Away Its Top Designer.” The phrase that caught my attention was not the resignation of a Googler. The red light was:
Bowman’s reasons for quitting are fascinating — and they show why Google’s losing its cool.
You can read the Gawker story and unravel the motivations of a Googler who sought greener pastures. The quest for quantitative data reminded me to recommend that you read John Ralston Saul’s Voltaire’s Bastards. You can get a copy on Amazon sometimes. Go for it here. Google is the high point of a data driven management culture. Zeta function, anyone?
Stephen Arnold, March 21, 2009
Evri: Semantic Smack Down
March 21, 2009
I don’t know much about Evri. Semantic technologies intrigued me a few years ago, but the shift is toward real time content processing. Semantics are important but in my mind plumbing that operates as a contributory component. I did write about the company’s deal with the Washington Post here. The Washington Post needs every (no pun intended) advantage it can get. Ad revenues are down. The Treasury is printing money like one of those fake countries in South American pot boilers. Even upscale restaurants’ business is down in the ultimate Power Lunch town.
I was surprised, maybe shocked, that Evri was shedding staff. Venture Beat here published “Semantic Search Engine Evri Cuts Staff by 25 Percent.” My impression was that Evri was going like a Harrod’s Creek mine worker on his way to the local watering hole. The most interesting comment in the article was:
Even so, Roseman [the president] says the company is pleased with its traction and progress, drawing more than 20 million monthly users.
Google AdSense on 20 million uniques should generate big money for Evri if properly monetized courtesy of Mother Google. Plus, Evri has received about $8 million from a Seattle investor. With strong uptake and big traffic, I wonder if staff cutbacks are a sign of the times or a signal that semantic search may be suffering in a down market for publishers such as those Evri has nailed as customers.
Stephen Arnold, March 21, 2009
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