See? It is all about search for MSFT!

Published by jtholmes May 22nd, 2008 in Search Engines. Closed

So Microsoft makes their intentions and motives clearly known. The latest offer splits the company and makes it more likely that that a deal will actually be reached. The recent salvo fired by Carl Icahn also makes this more likely.

So who wins if a deal gets reached? No telling. But it’s clear now that Ballmer believes that competing head to head with Google is a losing proposition unless they acquire Yahoo’s search business. That’s why been so willing to pay too much IMHO.

All this noise on the sidelines and Google just keeps plugging.

No surprises here.

Microsoft Newspaper Consortium? Apparently not to be…

Published by jtholmes May 5th, 2008 in Industry, Search Engines and advertising. Closed

Let’s be honest here, Microsoft has little interest in HotJobs or Yahoo’s display ad platform. This has all been about search and competing with Google. Although Microsoft has a minor stake in Career Builder, recruitment is not part of their core business.

Yahoo’s behavioral targeting and advertising platform is intriguing. I have high hopes for it and think it’s a product with an amazing upside for both Yahoo and participating newspapers.

However, if Microsoft would have pulled off it’s purchase of Yahoo I think one of two things would have happened:

  1. Key consortium member likely would have become nervous and opted out of the deal at the first inkling of reduced commitment to the pact.
  2. Microsoft would have sold off that part of the business. Maybe to the participating newspapers but probably to someone more at home in Silicon Valley. Like eBay.

This is all just interesting speculation but it remains to be seen what will now become of Yahoo. Can they regain any of their lost luster? Will their stock ever trade above the $33 a share that Microsoft offered? Right now it doesn’t look likely.

All of this puts Google in an awkward position. Google needs a viable competitor in order to keep the Justice Department at arms length. Simply running ads on Yahoo’s search pages riled an investigation. No doubt the Microsoft takeover would have resulted in major scrutiny but would have provided that much needed competition for Google.

Buried in all of this is an interesting parallel involving Microsoft.

In 1998 Apple seemed to finally realize that it couldn’t beat Microsoft in terms of selling more computers, licensing it’s operating system or competing with Windows head to head.

So much has been written about the return of Steve Jobs and ensuing products from Apple, like the iPod and original iMac. Apple was forced to innovate or die. We all know what happened - completely new markets, innovative products and a whole bunch of new fanboys.

Today Apple is a profitable diversified company with an intangible cool factor. Microsoft has been a lot of things but outside of the Xbox, cool hasn’t been one of them.

So the parallel is this: Can Microsoft, a company that is an Internet money loser, realize that it can’t beat Google by competing head on and innovate?

I doubt it. It’s just not who they are.

Refining my CPM post

Published by jtholmes April 27th, 2008 in Industry, CPM and advertising. Closed

I’ve received a few emails from folks that hated my “anti-CPM” post. My point wasn’t that newspapers shouldn’t sell advertising on a CPM basis. My point is that we, as local publishing companies, need to clearly and simply sell effective online advertising to our best local companies.

CPM should, at this point, be the underlying method of determining rates for a given product. However, pageviews and advertising impressions will continue to expand and dilute, putting continuing downward pressure on the CPM model.

Further, we can’t demand that every advertiser understand or even care about CPM. We’re in the business of selling local audiences and results.

Our mission is to deliver customers to our advertisers and make money. Staying relevant and in the game would be a nice bonus.

Why CPM needs to go away

Published by jtholmes April 14th, 2008 in Industry, CPM and advertising. Closed

Maybe not yet, but CPM isn’t the long term answer for local media sites. Unfortunately, the national nature of most online buys and the early “best practices” put forth by national publishers dictated the move to CPM.

As local media site publishers, we need to sell the value of our unique, local audience and deep local penetration instead of just the raw pageview and ad impression numbers. Pricing our products this way doesn’t need to be exclusive, multiple channels can be employed. The national buy is almost always for a specific CPM and this isn’t likely to change any time soon.

But I think it’s necessary to begin selling what I call “Share Of Position” (SOP) along with share of voice and other traditional metrics. For example, 50% of leaderboard advertising on Monday will cost you $250 (just an example.)

The biggest complaint I hear about from sales reps and advertisers is that “they never see their ad.” Part of this is because I agree with the Borrell theory of premium pricing, meaning we aren’t the cheapest media buy in town and we don’t often sell out.

However, by estimating ad impressions for certain site sections and selling SOP, we’re able to avoid some of the ugly details of CPM delivery and the advertisers can consistently see their ads online. Couple this with standing site feature sponsorships and bundles and you can position your site as the premiere local market buy online.

Makes a lot more sense to me versus going up against MySpace for garbage ad impressions.

Newspapers as technology companies

Published by jtholmes March 28th, 2008 in Industry. Closed

So everybody knows that newspapers *could* have owned the online space if they had acted quickly and effectively in the mid 90s.

But let’s be realistic; newspapers couldn’t have done what was necessary and taken the risks required to build a Google or Yahoo! (or at that time excite or lycos) let alone YouTube. Newspapers just haven’t been structured this way.

It really hit home with me last month after a conversation I had with Jay Small of Scripps at the America East conference in Hershey, PA. In his presentation he talked about a great internal program Scripps has. Essentially they want to foster an entrepreneurial spirit in their local markets by offering up $1 million dollars in a kind of venture capital effort to fund good ideas that local properties don’t have the budget to implement. It’s a great plan and forward thinking idea, especially for a newspaper company.

After his presentation Jay made an interesting point in passing conversation: Out of ten ideas, they (Scripps) are hoping for one good idea that generates a profit and/or creates a measurable audience (as Jay puts it: “Will the dog eat it?”) So they are willing to fail 9 out of ten times. But he also mentioned that the venture capital firms that invest in Silicon Valley are willing to fail hundreds of times for just one success.

So, it’s an increasingly tough and competitive field for newspapers. We haven’t been great technologists (understatement I know) but we’ve gotten better. Fortunately, most of us have great content and relationships with advertisers and our audience. Leveraging these relationships through better implementation of technology is required now.

Newspapers have always had a love/hate relationship with technology vendors. But if you think about it, most of the pure play competitors don’t use vendors at all. They develop technology, audience and sometimes revenue all at the same time. Shouldn’t newspapers operate more like this? I think so…

A Django site.