For the Week of February 24, 2003
There was much rejoicing over Google's purchase of Pyra Labs (makers of Blogger) but it left me wondering if, perhaps, Google had finally jumped the shark .
The price wasn't disclosed - both companies are privately held - but Google's only excuse for the purchase would be a frightfully low price. Pyra has just six employees and was mainly kept afloat by Dan Bricklin (of VisiCalc fame) . (Getting Bricklin on the Google team may, in the end, prove more important than getting Pyra founder Ev Williams .)
Despite its business failures Blogger has enormous reach - 1.1 million users by Williams' count, 200,000 of them regulars. Pyra, in other words, has been winning itself into the poor house (you can use the service, and Blogger's Blogspot servers, for free) and there must have been a fear they were about to be Salon-ed .
The same disconnects between content and commerce can be found across the Blogosphere, or Greater Blogistan, if you prefer. Dave Winer's Weblogger has a business model, but the "hottest" blogging software around, Movable Type , lacks one. WebCrimson , which I use, seems defiantly anti-business model, as does Corante, which hosts my blog .
It's almost as if bloggers, even the dreaded Warbloggers , were all Communists at heart, defiantly rejecting the market in order to get their words out. This can't go on. If it does the energy will fade, the best bloggers will find something else to do, and the technology's potential will dissipate. Volunteerism can take an industry only so far, and no farther. (Trust me on this.)
Google's task now must be to find a business model for Blogger that works (just moving hosting to Google's servers won't do it), and extend that to blogging generally. A business model will result in an infrastructure that eventually puts money into the hands of good writers (like me). Some ideas:
- Tie Blogger content to Google AdWords, so ads on blogs have real value.
- Use PageRank to provide a real ranking of blogs' reach, popularity and (most important) market value. (Blogstreet's system sucks, as does Technorati's and Blogdex' .)
- Index blogs in the same way Google News is indexed, creating a separate index tab from the main Google page.
- Use Google's Directory function on blogs, so we know what they're all about.
- Integrate comments on blogs to Usenet, a/k/a Google Groups, so they become searchable.
I have no fear that Google will favor Bloggers over others in areas like search - such a move would be stupid and Google isn't stupid. Under no circumstances should Google be hiring a lot of people for any of this. Google's present ad staff and technology can do most of the heavy lifting. Until Pyra shows some bottom-line improvement it must be kept lean, very lean.
SSP (Shameless Self-Promotion)
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Takes on the News
How to Advertise Online
The New York Times ran a feature last week about how some brands are creating custom sites, with real service, in a bid to lure customers online.
That's nice. It's important to recognize the need to deliver a service. It's important to understand that the Web is a pull, not just a push medium.
But there is a lot more that needs to be done. And as with the latest innovations, these are steps that must be taken by advertisers. Publishers will hose anyone, advertisers as well as readers, to gain more money for them. That's greed, not innovation.
Advertisers have a different motivation, one that has more in common with readers' interests than those of publishers. Advertisers want to move merchandise. Readers want to find, negotiate for, and buy merchandise.
One of my favorite innovators is Drew Kaplan . He is just now getting his ducks in a row - a site, an e-mail list, and a full line of products. His timing looks excellent.
You know Drew A. Kaplan as DAK, his initials, and he was quite big in direct mail until the "Asian contagion" of the late 1990s dried up his funding sources. (DAK is basically just a clever importer, identifying American market opportunities and Asian suppliers who can fill them.) He has been sending out "newsletters" for a few months now, each one filled with tips, techniques and links to more. They're designed to re-launch his relationship with gadget-holics, which he hopes to start sating in the spring.
There are some key principles at work here. Let's review them:
- Permission - Permission is the first key to a successful online sales relationship. Without it you're spamming, whether through e-mail or an ad. All the pop-up, pop-under, and full-page "you will sit through this" nonsense represents variations on the spam theme. You can ask for permission in an ad, but if you don't leave the consumer free to ignore you it's marketing rape.
- Payment - There are many ways to pay for attention. Service is one. Entertainment is another. Cash used to work, but coupons are just as good. Permission marketers have always paid for attention, through discounts or free samples. It's how you separate the prospects from the suspects.
- Relationship - Lifetime value became a hoary cliché during the 1990s, used to justify giving away merchandise without getting anything in return. Most retailers understand the value of a good, sound customer relationship. They also know what's required to earn it. Treat us like people, and fulfill your promises.
- The Sales Funnel - Every step from branding to final sale is a step down the sales funnel. Marketers need to understand the funnel, and the value of each step taken along it, if they're to correctly budget for a permission marketing campaign.
In most cases what you are selling is sought and needed by someone. Identifying prospects, getting the right pitch to them at an appropriate time, and closing the sale are all parts of the art of marketing. I have said here for six years now that the Internet is the first medium that lets you take every step along that road. It's the store, the support staff, and the ad flyer. It is long past time it was treated with the respect due it.
Once the lessons are learned and the disciplines of true Internet marketing are established throughout the business world, the rest of the media world had best watch out.
Big Opportunities in Linux
Want to make yourself some big money from the comfort of your own home? Organize support for aging commercial versions of Linux, such as Red Hat and Mandrake . If you have a group that can work bug fixes on-demand, you have a service you can sell.
How big is the opportunity? Charles Cooper of C|Net wrote last week that IBM's Linux sales for just the last quarter were $159.9 million, double a year earlier, while Hewlett-Packard's quarterly Linux take was up 81 percent from a year earlier, to $80.2 million, and Dell's take was up 66 percent, to $77.1 million. The top line numbers are still low, but they're the fastest-growing things in tech right now, and there is a bottom line that's black.
The biggest problem, security, is also being solved. IBM is getting behind the effort to have a common Linux "government certified," , a future requirement in major installations. This had been a deal-breaker against Linux, and for Windows - no longer.
You can look inside Linux, you can share your Linux code, and you can expand your Linux programming reach using the Web. In the server world Linux is becoming a standard, like HTML, but unlike HTML it's unlikely to be replaced by proprietary extensions (or automated programs like bloggers) any time soon.
Learn Linux, and prosper.
I'm a big Malcolm Gillis fan, but a question I brought him at a meeting of Rice alumni in Atlanta a few years ago drew a response I can only describe as curt.
In all this work on nanotechnology, much of which began with the Rice discovery of "Buckyballs" in the 1980s, what about ethics? I asked. Gillis, at the time, didn't see a problem, and didn't see a border, between what nanotech might come up with and what society might accept.
Many in the field still haven't gotten the message, but the opponents of science have gotten it, which an Institute of Physics journal has now admitted is becoming a big problem.
Of the major questions facing nanotech those involving the environment and the man-machine interface will get the headlines, but real attention needs to be paid to privacy and security. Governments won't stop the technology based on those concerns, but the market might. If nanotech becomes merely another way for government (and big business) to control citizens, it will have more than a boycott on its hands. It could have a Luddite revolution.
Clued-in is the decision to support ENUM domains (based on phone numbers) , which is the best route for rendering the telephone network obsolete.
Clueless is the increasingly common assumption that governments seeking to control the Internet completely succeed in that effort, or gain the Internet's benefits for their citizens. The virus of freedom enters through every Internet connection, and it lives in every person it touches.
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