Internet Consolidation or Fragmentation? (Long Tail Of Pages, Views, Ads?)

Fox buys Myspace. Google buys Youtube, Doubleclick, and many more companies. Microsoft wants Yahoo. AOL picks up the crumbs ;-) (Internet Giants Buy...) Is the Internet consolidating or fragmenting?

Conventional Wisdom

Conventional wisdom suggests that the large companies get bigger - and dominate mindshare. Game over.

Anecdotal reports suggest that even Top 100 publishers sell only 40% of inventory through direct means. This problem is well-illustrated by the diparity between page views and revenues: 30-40% of total Internet page views can be attributed to the 10 most trafficked domains, while ad dollars for the top 10 largest online publishers tracked by the Interactive Advertising Bureau account for approximately 70% of industry revenues. This concentration at the top is unlikely to abate in the near term. Ad networks offer one way to "spread the wealth," at the same time positioning themselves to generate revenue growth in excess of the broader market.

The top 100 includes global brands like Yahoo, Google, Fox, Microsoft, New York Times, and Time Warner. The bottom millions include most newspapers, vertical and B2B magazines, 100 million bloggers, and emerging Internet only brands from around the globe.

Is this the current trend for the Internet?

Trends toward Fragmentation

• Bloggers produce 1.6 million posts per day; overwhelming the output from the top 100 sites. Photo and video uploads also overwhelm the output by the staff of the top 100.
• Social networks, games, and video sharing taking mindshare away from search, email, and legacy uses.

• Facebook and LinkedIn have out-performed Google's Orkut, Yahoo's 360, and Microsoft's Spaces. Facebook Apps has a huge lead ove Googe's OpenSocial consortium.
• Thousands of new companies have been funded to attack digital media. Facebook Apps decrease the capital needed and reduce marketing costs to nil, for many ventures. Hundreds of start-ups have traction with millions of users.
• In-game, in-video, and in-widget advertising takes ad revenue share from the top 100.
• Google is losing brand publishers to Quigo. Quigo is willing to allow publishers to brand text ads and sell their own inventory.

Conclusion

Can iMedia companies match overall growth from just internal projects? Will new companies continue to out-perform legacy companies? Will iMedia companies continue to buy to maintain global share?

Can the industry keep up to accomodate the changing Internet?

Counting the Streams in a New Media Age - Dec 17, 2007

Media distribution is becoming fragmented much quicker than the currency can
handle.

NEWS: Microsoft to Buy Web Ad Analysis Company

Microsoft to Buy Web Ad Analysis Company

SEATTLE (AP) -- Microsoft Corp. plans to buy Rapt Inc., plugging a hole in its suite of tools for Web publishers and advertisers, the software giant said Friday. Rapt's software and consulting services help Web site publishers tweak how they package and price display-ad space. Scott Howe, a general manager in Microsoft's advertiser and publisher solutions group, said Rapt's system is similar to the one airlines use to set ticket prices and track available seats.

Microsoft has had hands-on experience as one of Rapt's customers. Tom Chavez, Rapt's chief executive, said in an interview that his company's technology helped boost MSN's ad revenue 15 percent to 20 percent, a typical improvement.

The Redmond, Wash.-based software maker has bought several companies to fill out its digital ad offerings, including AdECN, a stock market-like exchange where networks representing Web sites buy and sell ad space, and Massive, which inserts ads into video games.

Microsoft Picks Up Israeli Ad-Targetting Software Startup YaData for a Reported $20 Million to $30 Million, TechCrunch

Zd`rravstvuite: Google May Be Buying Ukrainian Portal Bigmir)net For $100 Million, Techcrunch, Feb 22, 2008

NEWS: Blogging and Newspapers, a Lesson in How Not to Brand

Blogging and Newspapers, a Lesson in How Not to Brand and Market

Mar 13th 2008 1:33PM by Mark Cuban

... Which leads to my firm belief that newspapers having "bloggers" is easily one of the many bad decisions that newspapers have made over the past 10 years...

Never, ever, ever consider something that any literate human being with Internet access can create in under 5 minutes to be a product or service that can in any way differentiate your business...

If I worked for the NY Times, or any other media company with any level of brand equity, I would have done everything possible to define the section of our website that offers ongoing as anything other than a blog. I would make up a name. Call it say.....RealTime Reporting.

RealTime Yankees: Catch in depth, up to the minute reports on the Yankees as only the NY Times world re known staff of Sports Writers can bring up

RealTime City Hall: The NY Times has more journalists covering the action at City Hall than anyone else. Catch in depth, up to the minute reports on NYC politics as as only the NY Times can.

Brand it RealTime. Brand it anything. Make sure you market it as having the characteristics unique to your staff that NO ONE ELSE on the net can bring.

NEWS: Two Thirds of Americans Dissatisfied With The Quality of Journalism

Two Thirds of Americans Dissatisfied With The Quality of Journalism Posted March 13th, 2008 by Jack Loechner

A new WeMedia/Zogby Interactive poll shows that 67% of Americans believe traditional journalism is out of touch with what Americans want from their news. In addition, the survey found that while almost 70% of Americans think journalism is important to the quality of life in their communities, though two thirds are not satisfied with the quality of journalism in their communities. ...

Although 64% of Americans are dissatisfied with the quality of journalism overall satisfaction with journalism has increased to 35% from 27% who said the same in 2007

• 87% believe professional journalism has a vital role to play in journalism's future, although 77% see citizen journalism and 59% see blogging as significant in journalism's future
• 1% of Americans consider blogs their most trusted source of news, or their primary source of news
• 75% believe the Internet has had a positive impact on the overall quality of journalism
• 69% believe media companies are becoming too large and powerful to allow for competition

For more on the study, please visit here.

News - Columbia University Graduate School of Journalism

Jan 14, 2008 ... The audience of 100 journalists, students and others listened intently to the conversation as the two discussed the quality of journalism, ...

On Journalism

Abrams asked Dobbs for his views on the quality of journalism in America.

“It’s pitiful,” said Dobbs. “[We have] an elitist press that determines issues for elitist candidates.”

He explained that he believes the stakes are much higher than they used to be. According to Dobbs, there was a time when the journalist was a powerful individual. He cited James Reston as an example. But now, he said, because of media conglomerates, corporate America often dictates what gets covered. He berated the media's coverage of the Iowa Caucus and the New Hampshire primary, saying they madetoo much of Barack Obama’s win and Hilary Clinton’s loss in the caucus.
“When she won in New Hampshire,” he said, “it was [in the press] the greatest comeback story in history. [But actually] It’s just one little election, he said.

Now There's A Concept: Newspapers Should Add Value To The News
by Michael Masnick Wednesday, March 12th, 2008 @ 5:34PM

It's certainly been rather painful watching newspapers struggle to adapt to the Internet age. While there's more demand for news today than ever before, many news organizations are still struggling with the fact that their old way of doing business has gone away. Romenesko points us to a useful, if somewhat obvious quote on what newspapers need to do from the chief marketing officer of Northwestern's Kellog School of Management: "The majority of 'news' customers are past 'what happened' -- they want to know 'how it happened.'" What's scary is the idea that news organizations need to be told this. "News" today is a different beast than it was in the past. The basic facts, people can get anywhere. What they're interested in is being able to dig down and learn more. In other words, they want journalists to actually add value. What a concept.

Ed: 1. Mass media losing momentum. 2. Social media gains mindshare. 3. Blogs lack brand, trust.

NEWS: Google’s Trojan Horse: Let the Free Ad Serving Begin

March 13, 2008, 4:15 pm
By Saul Hansell

One of the biggest misunderstandings in much of the discussion about Google’s deal to buy DoubleClick is the perception that DoubleClick actually is involved in selling advertising. (full)

ANALYSIS: Where's the ROI on Google, Microsoft's Investments on Targeting

Google has invested consistently on contextual targeting for over ten years. Microsoft and Yahoo have spent heavily to gain behavior targeting expertise. In February of this year, Google admitted weakness with selling ads on MySpace. Now, a Microsoft executive admits the same with Facebook. Both blame social networks.

March 12, 2008
The Facebook Factor: Declining CPMs

Social networks have flooded the market with inventory, pushing down ad rates based on CPM, according to one Microsoft executive.

Dean Carignan, Microsoft's director of ad business strategy in the entertainment and device division, made that disclosure during a panel discussion today at the McGraw-Hill Media Summit in New York City.

Is it Social Networks? Or Non-Scalable Targeting?

Where's the ROI on targeting? Aside from the many anecdotal evidence of cute behavior targeting told by hundreds of AdNets, why have the companies with the largest research staff been unable to monetize targeting?

Is behavior targeting just another chapter of the old AI saga?

ANALYSIS: What is Time Warner?

Time Warner is an ISP, IChannel, and AdNet - integrated media company. Revenues are spread across access fees, subscriptions, and advertising. How are they doing?

Internet Service Provider

• Time Warner Cable / Roadrunner
• AOL dial-up access - majority owned

Internet Channels (list of assets)

• Portal / search - AOL, Roadrunner, Mapquest
• Social media - AIM, Bebo
• Video - Warner Brothers/New Line, HBO, CNN, TBS, Cartoon Network, ...
• Magazine - Times, People, Fortune ...

Advertising Network / Platform A

• Advertising.com - third-party remnant inventory
• Quigo - grow branded CPC inventory
• Tacoda - targeting to improve value of unbranded inventory
• ADTECH, buy.at, Kipmart, Lightningcast, and Third Screen Media

Bewkes: AOL Facing Another "Flat" Quarter
Michael Learmonth March 11, 2008 1:40 PM

Time Warner CEO Jeff Bewkes said AOL has another quarter of "flat" ad growth ahead of it as more of its users go straight to Google for search rather than searching within AOL. Bewkes said he wants to operate the access and advertising ends of the business separately, and would entertain a sale or combination for either side that made sense. "Would something added to AOL make it more viable? We can't rule it out," he said at Bear Stearns media conference in Palm Beach, Fla.

AOL Buying No. 3 Social Networking Site

Bebo lacks the hundred million friends of MySpace and the charmed social status of Facebook. But it is the third most popular social networking Web site in the United States and, to the besieged Internet company AOL, it is worth $850 million.

NEWS: Cable Firms Join Forces to Attract Focused Ads

By TIM ARANGO
Published: March 10, 2008

In an effort to slow Google’s siphoning of advertising dollars away from television, the nation’s six largest cable companies are making plans for a jointly owned company that would allow national advertisers to buy customized ads and interactive ads across the companies’ systems.

For the last six months, executives from Comcast, Time Warner Cable, Cablevision,
Cox Communications, Charter Communications and Bright House Networks have been meeting monthly, alternating between New York and Philadelphia.

...

Here is what is at stake. Combined, the nation’s cable operators generate about $5 billion in revenue from selling local advertising in markets where they own the infrastructure to people’s homes, a small slice of the $70 billion television advertising pot. They largely compete with local newspapers and radio stations. But Project Canoe will allow the industry to sell ads on a nationwide basis through a joint platform.

For each hour of programming on a cable network, the cable operator owns about two minutes that it can sell to advertisers. The network, say ESPN or TNT, owns about 15 minutes that it can sell.

Because the only way to deliver custom television advertising is through a cable set-top box, Project Canoe is also a way for the cable companies to get a piece of the advertising revenue. This is done by allowing cable networks like ESPN or a broadcast network like CBS to sell ads on Project Canoe’s platform and direct those ads using the vast amount of data collected from set-top boxes.

The executives involved in Project Canoe think that, by working together, they can increase the cable industry’s take from $5 billion a year to $15 billion a year, according to an executive briefed on research compiled by Project Canoe.

Another component of Project Canoe is interactive advertising, which allows television viewers to use remote controls to, say, request a brochure or call up more information about a product.

Ed: 1. Aggregate local minutes into national minutes. 2. Use settop box to target ads and increase eCPM. 3. Allow broadcast networks to use targeting to increase eCPM.

HOW-TO: How I Use Blogger

Blogging provides unlimited sheets of paper. Here is how I use Blogger to collect my ideas.

News, Stats, Forums

News show snips of relevant content. Multiple related snippets offer reading convenience. I use copy and paste to collect snips. You can also use Yahoo Bookmarks and social media sites like Del.icio.us, Digg, Mixx, Technorati, etc... to select favorite articles. Hint: the keyword/labels/topics feature sorts articles for your intended future analysis.

Stats provide the data for economic analysis.

Forums attempt to centralize user feedback. It's not working well since readers can post comments anywhere. 

How-To and Analysis Posts

The how-to posts delve deep into an application for sharing with the community.

Analysis identify industry and company trends - with links to the news, stats, and forum posts.

FYI
-Dash Chang

Privacy. Who's Peeking?

Publishers have no privacy. What about users? Who's peeking at your activities? Is privacy about avoiding targeted ads?

Publishers Have No Privacy

Whether a website or blog, every page is immediately visible to the billion users on the Internet. Publishers opt into each stage.

• Hundreds of web robots, like Alta Vista, Google, Yahoo, etc., seek and rummage through every public IP address (i.e. a domain name maps to an IP address) to discover new sites and content.
• Blog robots, like Technorati, digest weblog contents, almost immediately.
• Widgets, like AddThis, Feedburner, FriendFeed, etc., report activities to publishers, networks, and sometimes to users.
• Every adNet participation, such as Adbrite, Advertising.com, AdSense, Linkshare, YieldManager, etc., provides the network with detailed views.

In short, publishers can't keep secrets. Dozens, if not hundreds, of networks can see details on your content and views of your content. The first amendment of the US Bill of Rights guarantees free speech. The open Internet self-regulates the relevancy of speech.

Tracking Individuals

As networks track publishers, they also gather data about users. Here are the ways data is collected.

Any Device Leaks Data

Any device that connects to a network can be tracked. These devices include computers, phones, PDAs, financial cards, and dozens of emerging devices. Who is able to track the devices?

• The manufacturer of the device like Apple, Dell, HP, Motorola, Nokia, etc.
• The source of the platform software like Apple, Firefox, McAfee, Microsoft, Palm, Symantec, etc.
• Credit card transactions through banks and financial intermediaries
• The ISP (i.e. Internet Service Provider) like AT&T, BT, Comcast, Sprint Verizon, etc.

Note that the list includes some of the largest companies in the world.

Software Leaks Data

Each toolbar, application, or gadget leaks data. Here are some examples.

• Toolbars from Amazon, Blogger, eBay, Google, Microsoft, Yahoo, etc. have the means to report data.
• Alexa, compete, comScore, Neilsen, and Quantcast purposefully report user actions.
• Flash, iTunes, Media player, PDF readers track data
• Downloaded games

What Can a Website See?

When users frequent a website, what can the publisher see? How can they use the information?

• Opt-in profile information at AOL, Facebook, Google, Microsoft, Myspace, Yahoo, etc.
• Server logs show who views what
• Search portals collect every keyword
• Commerce sites know what you bought
• Web services and open APIs share across sites
• Cookies tie across sites

Public Profile Information

The US first amendment grants freedom of speech and press. What public information is posted about individuals?

• Newspaper articles and interviews
• Yellow and white page directories
• Event attendees
• Private email exchanges posted by individuals

Anger Toward Advertising Networks

Despite the volumes of data available about private citizens, public anger has focused on ad targeting.

A study of California adults last year found that 85 percent thought sites
should not be allowed to track their behavior around the Web to show them ads,
according to the Samuelson Law, Technology & Public Policy Clinic at the
University of California at Berkeley, which conducted the study.

Advertising is the tail end of the Internet ecosystem. Does it make sense to blame advertising? Is search aggregation of data about an individual the real issue?

Questions

One benefit of tracking is that authorities have a rich tool to identify hackers, criminals, and terrorists. However, is the loss of individual privacy too high a price to pay?

We can't give up technology and avoid the Internet. Is Internet privacy a problem? What's the solution?

Advertising won't go away. Is privacy an ad serving problem? Is there a self-regulating solution?

---

Published: March 10, 2008
To Aim Ads, Web Is Keeping Closer Eye on You, By LOUISE STORY

A famous New Yorker cartoon from 1993 showed two dogs at a computer, with one
saying to the other, “On the Internet, nobody knows you’re a dog.”

March 9, 2008, 11:19 pm
How Do They Track You? Let Us Count the Ways, By Louise Story, New York Times

The comScore study tallied five types of “data collection events” on the Internet for 15 large media companies. Four of these events are actions that occur on the sites the media companies run: Pages displayed, search queries entered, videos played, and advertising displayed. Each time one of those four things occurs, there is a conversation between the user’s computer and the server of the company that owns the site or serves the ad.

The fifth area that comScore looked at was ads served on pages anywhere on the Web by advertising networks owned by the media companies. These include text ads provided by Google’s AdSense network, for example, and display ads from AOL’s Advertising.com unit. Ad networks add the ability for these companies to note where you are on other Web sites when they serve you an ad. Google, for example, can note that your Internet Protocol address is on Kelly Blue Book, if it serves you an AdSense ad there.

Federal Trade Commission - Privacy Initiatives

Government Site that is run by the Federal Trade Commission. Information about
how the government can help protect kids and the general public.

Electronic Privacy Information Center

The Electronic Privacy Information Center (EPIC) focuses public attention on emerging civil liberties, privacy, First Amendmen issues and works to promote ...

Privacy Electronic Frontier Foundation

Campaign for online privacy and security includes news, links and resources.

Privacy - Wikipedia, the free encyclopedia

Privacy is the ability of an individual or group to seclude themselves or
information about themselves and thereby reveal themselves selectively. ...

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