Alan Meckler has a very nice post about Jason Calacanis on his weblog.
It was good to catch up with Jason and see a living, breathing Internet "Phoenix." With Google and now AskJeeves buying bigtime into the blog space it is only a matter of time before someone knocks on Jason's door for an acquisition.
I agree that Jason and weblogsinc are doing some awesome things. In an email I wrote to Judith Meskill today, I told her we were planning to emulate weblogsinc's business model, by applying their revenue share deal to the event planning business. So, if mimicry is the highest form of flattery, they should be flattered.
There are some things that Jason blogs about that I disagree with, however. Two of those things would be my perspective on marqui's blogosphere program and word of mouth marketing, in general.
Another thing I disagree with is Jason Calacanis's interesting opinion about blogline's business model.
Bloglines was bought this past week by Ask Jeeves out of desperation. It’s a horrible business and it will never make money.
If I could summarize the rest of the post, Jason says:
- Microsoft, yahoo and google (maybe firefox) will be the defacto rss aggregators.
- Web based aggregators are inferior to desktop based aggregators.
- That aggregators cannott make money from advertising.
Although, I could counterpoint the first two assumptions also, I'd like to focus on the third, as I'd say it is the most flawed and based on Jason's biases and frustrations.
Here's the paraphrased version of a conversation that Mark Fletcher had with Eric Peterson regarding potential advertising delivery on bloglines:
The essence of his answer is "AdWords on Steroids" (my translation, appropriate given their proximity to the BALCO scandal in Northern California). The idea that any article or feed I'm interested in will be littered with content that can be mined and transformed into relevant pay-per-click advertising. Mark's point was that while Google and Overture sell advertising based on a limited number of keywords, the content in feeds is rich with information that can be mined to laser-target the advertising.
He commented that the aggregate of subscriptions could also be mined to provide additional inventory, e.g., if I subscribe to Engadget and Gizmodo there is A) a strong chance I am a personal technology person and B) I am probably subscribed to other blogs that are gadget-relevant. These additional blogs would then be candidates for gadget ad inventory, QED.
While I'm not a huge fan of advertising in blogs I am a huge fan of good technology being supported by good business models. I think Mark's idea makes sense and is a better idea than injecting advertisments into my feeds, a practice I personally feel is intrusive. Mark indicated that they hope to slowly roll-out this advertising model early next year.
Jason thinks this is "stupid" because it would allow bloglines to generate revenue from Jason's team's content while not paying any royalties to weblogsinc or their writers.
Now, I don't think the idea is stupid. I do think that Jason is pissed that Mark Fletcher didn't give him the time of day. I also think that there is reason for Jason to be pissed, given that if bloglines did deliver ads against his content, that Jason's business model would be shot to shit. But, as someone that doesn't get the time of day from a lot of people that I'd like the time of day from, I say that Jason should get over it. And since business models are shot to shit everyday, advertising by aggregators might be something that weblogsinc should consider a possibility.
I do think that this is quandary for many bloggers, but I think it is more a quandary for bloggers trying to create blog analogs of traditional journalistic enterprises, like weblogsinc, corante and gawker.
So, my questions for everyone involved here, in order to make this more of a conversation, than a pissing contest....
Will consumers think this advertising is stupid?
Will the advertising that bloglines delivers, because they know more about all of my interests, be more targeted than what blog publishing tools (or companies) can deliver?
What if bloglines shared revenue with bloggers? (I know this would drastically reduce the margins that Calacanis/Stowe/Denton could demand with their offline ad sales efforts, but the rest of us probably would appreciate it. Especially, if it is was more effectively targeted advertising than adsense. And aren't the rest of us combined a larger number of publishers than those three companies?)
What if we couldn't read weblogsinc's blogs through bloglines? Would that matter? Would I stop using bloglines? I probably wouldn't. You?
Could blogs actually stop syndication to one place? Isn't there ways around this? Couldn't someone re-syndicate weblogsinc's feed from somewhere else? What if more people adopted Marc Canter's style of posting: blockquoted a complete post and added a statement or two? Only, the decided they'd do it to all of engadget's posts? Would blog companies resort to RIAA tactics?
More questions anyone?
In summary, I think there will be a struggle between aggregators and publishers coming shortly. I don't think it'll be as simple as publisher gets all of the ad money. In fact, I think that aggregators will have more power to exert influence over publishers in the short term. And if we make the assumption that MS, google and Yahoo will be controlling that business, isn't it safe to assume that they will figure out how to make money from advertising using their aggregators?
I do think that the conversation needs to be about finding a win-win solution that lets everyone make money. And I do think that the content producers deserve the greater share. I think it'd behoove the content producers to be figuring out how to do that. And I think a strategy beyond simply combining to exert market power is required, which is the current strategy of most media companies, including weblogsinc, et al.
Pete, you nailed it. Producers will always end up with the shorter end of the stick. Take a look at any other industry. Producers need, and end up dependant on, the "services" of a few to market their poduct. Let's face it, producers make the content, which costs nothing to create (a commodity in my book), and the servicers are just adding value. They will always be in the best position, because they can pick and choose, the producers cannot.
Good stuff, keep it up.
Posted by: Ben Smith | February 09, 2005 at 11:46 PM
>> Now, I don't think the idea is stupid. I do think
>> that Jason is pissed that Mark Fletcher didn't give
>> him the time of day. I also think that there is reason
>> for Jason to be pissed, given that if bloglines did
>> deliver ads against his content, that Jason's business
>> model would be shot to shit. But, as someone that doesn't
>> get the time of day from a lot of people that I'd like
>> the time of day from, I say that Jason should get over
>> it. And since business models are shot to shit everyday,
>> advertising by aggregators might be something that
>> weblogsinc should consider a possibility.
Uhhh... so if someone starts email people stories from the New York Times every day and selling ads around the content the New York Times should just "get over it" -- are you serious about that?!
Just because RSS is new doesn't mean that the rules of business/law go away. Putting ads--or targeting users--around a feed that is provided for non-commercial use is breaking the law and we would treat it like such. Just like other publishers have defended themselves. People made services like the email scrapper I discussed above--and they got spanked big time.
This is not a matter of Mark not giving me the time of day--trust me I've got some bigger contacts--it's about stopping people from creating illegal and unethical business models. That's my role in the blogosphere... we see the problems before most people because we have 71 bloggers getting paid and over 100 active advertisers. We are nipping this stuff in the bud so other bloggers and publishers are protected.
2. There are merits to a web-based RSS reader, just like there are to web v. client side email/IM/chat/sales software/etc. I'm not saying that the web-based stuff is a bad business--I'm saying any RSS reader business is not a standalone business with the exception of enterprise software plays like Newsgator.
>> What if bloglines shared revenue with bloggers? (I
>> know this would drastically reduce the margins that
>> Calacanis/Stowe/Denton could demand with their offline
>> ad sales efforts, but the rest of us probably would
>> appreciate it.
Actually, we would welcome and are working on a solution like this. Provided it is a) optin (not opt out) and b) in the 80-20 range we would do it.
More to come... thanks for the thoughts.
best j
Posted by: Jason | February 10, 2005 at 01:14 PM
I should have left out the "time of day" comment. I was inferring that you should get over that.
I was not inferring that you should get over them serving ads on top of your content.
Good luck with trying to get an 80/20 revenue split from all of these aggregators, over the long term. I don't envy your position.
I think that there should be a wider conversation that is OUT IN THE OPEN about how to solve this problem.
Publisher opt-in is a reasonable demand and seems like the right thing to do. I look forward to an aggregator launching something like that. It seems that that would be an excellent opportunity for launching another ppc network, or for extending a current network's inventory very quickly.
The work that overture and feedburner are doing seems like a step in the right direction for that.
Maybe, weblogsinc should start/endorse an rss ad-network that shares $ with the publishers and the aggregators.
I am also suggesting that with the knowledge that bloglines has of user's reading habits, that they might be able to serve better ads than you do, because of the aggregate data. For example, I read blogs on marketing and I read blogs on social software. The aggregator knows that. You don't. Therefore, they know my aggregate interests better. So, for behavior targeted ads, these guys have a leg up over the publishers. Also, they have an idea of what the people that read me - read too. So, ad targeting could be done based on the density of a social network. Imagine that a company could publish ads with customized marketing copy according to the conversation that we were having. Therefore, as a reader, I would welcome ads delivered while I read feeds in my aggregayor from the aggregator. Because they will be more targeted.
Posted by: peter caputa | February 10, 2005 at 02:53 PM
>> Maybe, weblogsinc should start/endorse an rss
>> ad-network that shares $ with the publishers
>> and the aggregators.
I could see that happening.
Posted by: Jason | February 10, 2005 at 03:44 PM
Hey Pete,
I think you got it perfectly. The problem is from the publisher side, not the consumer side. I agree with you, contextual advertising in Bloglines doesn't bother me one bit and I've always thought it was going to be there revenue model. As I said over on my site, if Bloglines started selling against Engadget and Jason pulled Engadget, I'd stop reading the site, not stop using Bloglines. (Just for the record, I really enjoy Engadget and it would be a real shame.) The other thing is that the advertisements within the Engadget feed wouldn't go anywhere. Is the problem Jason has specifically with selling against one of his blogs? Or selling advertising against the user profile that Bloglines has? Because while he may have some control over the prior, it would seem to me that he can't really control the latter. GMail essentially sells ads against anything, including pay-to-recieve newsletters, and people don't complain.
It's very interesting stuff. I've written a bit about it myself over at my site: http://www.noahbrier.com/archives/2005/02/bloglines_adver_1.html
Posted by: Noah Brier | February 10, 2005 at 04:27 PM