Modernize Newspapers

Newspapers as Local Tech Resellers

Much attention has been given to old business models as folks in the local media business struggle to figure out how to make newspapers economically viable.

I have an idea that I'd like to throw into the ring -- turn newspapers into resellers of technology products to the local market.

Newspapers have a large local sales force that understands the need of local businesses.  Sure, in some cases, the sales force at your local newspaper is nothing more than a group of semi-qualified "order takers", but if that remains the case then it would behoove each local paper to get rid of everyone on staff and outsource sales to a call center in India.  "Order takers" have to become more economically viable, or they'll be replaced or eliminated over time.

Local businesses need help navigating technology.  Even in 2009, a lot of people don't understand the value of technology and how it can (and often is) harnessed to help businesses be more productive, advertise better, or provide better products and services to customers.

Yahoo has tapped into this to some extent with their Newspaper Consortium.  But I'm thinking of something bigger with a lot more potential.  I'm thinking of something akin to Microsoft's partner channel.  Microsoft doesn't sell directly to customers as a focus of their business.  Instead, they employ a variety of resellers to serve as front-line help, sales, and support for Microsoft products.

It's a radical idea, but it makes a lot more sense to me than hanging on to an old way of doing business.

On a less radical front, I do think that newspapers could be an effective reseller of products that help local businesses reach customers.  Just about all local businesses need help advertising themselves in their local market.  Local media can help make that a reality.  That's why we're beginning to offer our products MinutesNotice to select local media families.  I think it's a model that can help newspapers and local television companies find margin where there simply wasn't any before.  More to come as we progress.  For more information, check out our recently improved web site.

Why Google, Microsoft, IBM, Oracle Solutions to NAA Problems All Miss the Mark

I thought I'd share a few quick thoughts today on responses to the NAA's request for information from the technology/internet industry on monetizing local media.  I've reviewed proposals from Google, Microsoft, IBM, and Oracle and a few new entrants so far in preparation for sending the NAA an unsolicited proposal of our own specifically around local advertising.

Microsoft did the best job IMO of translating "techspeak" into a workable vision for the future, although it appears to be as others have suggested somewhat of a ripoff of TweetDeck.  Interestingly enough, Microsoft's response suggested that the newspaper business utilize 15 products in unison to make their ambitious proposal a reality.

Quick sidebar -- in my 3 1/2 years at Microsoft, we occasionally ran across opportunities like this.  We similarly responded because there were two benefits for our business:  1) revenue, 2) case studies.  There is no case study quite like solving a contemporary problem (like "saving" local newspapers w/ Microsoft technology in this case.)  So when something like this would happen, we'd eagerly participate.  Granted, we really couldn't offer "true innovation"... Microsoft really doesn't innovate all that much... but we could enable things to happen with a great Web tools and technologies platform.

This effort by Rainer Kellerhals and the team at Sobees (a Swiss startup as far as I can tell) is about as good as Microsoft can do IMO without reaching out to a broader range of startups to build a truly innovative and effective solution.  Microsoft needs a handful of other "Sobees" for other parts of a solution for it to be truly effective -- more on that in a bit.

But my point is that big companies like Microsoft, IBM, Oracle, and to some extent Google have conflicting goals.  Sure they want innovation, but first and foremost they want adoption/sales/increased revenue of existing tools and technologies.  Innovation is a justification for using their offerings.  Innovation is not central to their existence or participation.

The startup community, on the other hand, is always pushing at the edges to find new ways of doing things.  This typically involves finding new opportunities, cutting costs where possible, and working with new technologies to become more efficient.  I would venture to say that the startup community has very few peers when it comes to the clever & inventive utilization of real-time, social media, and mobile technologies.

Similarly, innovators like the Huffington Post, Mashable, Craigslist, Digg, Stocktwits, Fark, and others have built very profitable businesses utilizing Internet technologies in interesting ways.

If the NAA and the newspaper business truly wants to innovate, it needs to look to the future.  Microsoft, IBM, Oracle, and Google are great companies that have done great things in the past -- and they can certainly be part of a solution.  But these companies can't do it alone.  The NAA must actively engage the startup community and new entrants, or the it will continue to create rivals with the wherewithal and motivation to compete.

Microsoft & Newspapers/Local Media - more alike than you'd think

A few weeks ago it occurred to me that, at least conceptually, I have seen the problems faced by the newspaper industry before... at Microsoft.

Both face classic Innovators' Dilemma challenges.

Microsoft is trying to hang on to huge annuity streams from client software, which is a tougher business than ever in 2009 and one that isn't getting any easier.  So Microsoft is forced to straddle the fine line between hanging on to the client and "Modernizing" with Web business models, which I've argued for some time are at least a mildly deflationary force thanks in large part to Google.

The newspaper/local media business is in exactly the same place.  Old advertising models, which are today characterized by inefficiency and questionable effectiveness, are becoming less and less popular with advertisers.  Everything is moving to the Web, where monetization is similarly questionable.  Better monetizing the Web is critical to the future of the newspaper/local media industry, yet it can't quite replace the revenue provided by the old business model.

I suspect that Microsoft and Newspapers/local media businesses will find that the easiest path to success is in being aggressive... by devoting a meaningful but not overwhelming % of available resources to experimentation.  Take two examples I am very familiar with for example:  work done by the Austin American Statesman around Twitter, and alternative Web properties and the Dallas Morning News around "big media" hyperlocal.  These are organizations that place a premium on learning and experimentation -- two major keys to getting the Web.  Veterans in the Web business know that experimentation pays off with serendipity.  You don't know where your experimenation will pay off, but you commit to the process because you know that it will eventually create business opportunity & create shareholder value, even it isn't immediately apparent.

So if you're looking to see how things will go for these incumbent businesses challenged by disruption, pay close attention to signs of experimentation and innovation.  Typically, a success story or two are right around the corner.

Facebook v. Twitter -- it's war

I don't think it's hyperbole when the folks at Techcrunch say that Facebook and Twitter are now at war.  I do think that the stage has been set for quite some time - each company has made sufficient progress that they have now collided.  There is no going back.

What can we take away from the latest news?

Twitter has experienced meteoric growth for two reasons IMO:

1. Simplicity -- everything about Twitter is easy, as you'd expect from an interface with 140 characters,
2. Brilliantly executed developer strategy -- the developer API is similarly simple; integration is easy.

Facebook is decidedly *not* simple, but I'm sure they are very, very jealous of all the third-party Twitter applications that have been created over the last few months.

As a third-party startup, I have to tell you that I think the value proposition for Facebook is very, very strong.  Who wouldn't want access to data on 200m+ users.  But I also suspect that the Open Stream API will not be truly open... i.e. developers won't have access to all data they want/need to build third party apps.  The big question is "will Facebook be able to offer enough data to be successful with this approach while keeping the truly valuable data for their own ad targeting purposes?"  If they get this right, they'll remain the dominant social OS powered by ridiculous revenue opportunities.

From my vantagepoint, it can still go either way.  Twitter's advantages in simplicity from both the User and Developer perspectives don't change in light of the recent Facebook announcement.  Similarly, Facebook's advantages in Installed Base & breadth of data collected won't change if Twitter adds 50m users.

Other random reactions:

• I'm glad the game for developers has moved to social platforms.  But all this news does is guarantees that developers will need to be capable in *both* Facebook and Twitter.
• Along those lines, I think Facebook and Twitter strategy just sortof became the same thing for many corporations eager to connect with consumers.  You can't do one without at least considering the other.
• I think this is ultimately a proxy war for Google v. Microsoft for what it's worth.  Maybe not today, but soon.
• Internet marketing is dying in lieu of social marketing.  I'll elaborate on this in a later blog post.
• Friendfeed and Yahoo! sure feel similar to me -- valuable properties/companies who do great things but are nonetheless stuck in "RC Cola land".  Friendfeed will need to change the game somehow, some way to get into the debate.

More pleasure reading:

http://blogs.zdnet.com/BTL/?p=17068

http://www.readwriteweb.com/archives/despite_new_openness_facebook_remains_fundamentall_1.php

http://www.briansolis.com/2009/04/social-os-battle-between-facebook-and.html