Tim Oren's Due Diligence

Startup Helps MSM Sites Become SEO Spammers

How often do you find a cross-over story about three notable Left Coast industries: venture capital, media, and -- err -- sex?

It seems that noted San Francisco sex writer Violet Blue did some checking on what the SF Chron and sfgate.com were doing with her content (NSFW WARNING) and didn't like what she found. Her past columns had been copied to another domain, all outbound links (and some punctuation) stripped, the articles split into multiple pages, the pages stuffed with keywords - some inappropriate, and festooned with pay-per-click ads. And it emerged that multiple domains had also been aliased to these dead-end copies. Now where have we seen that kind of behavior before?

Here I should mention that sfgate.com is apparently - by admission of the author - within the letter of her contract by making this use of her work. That relationship, now terminated, was based on a level of trust that she feels has been abused, and made no explicit stipulations on how the content can be reused. The interest here is what this incident may say about the ongoing behavior of the MSM online, and its implications for the industry's business model.

This occurrence is not a one-off. The Violet Blue post also mentions the LA Times as creating similar ad-stuffed dead end pages, also with a list of multiple aliased domains. What caught my attention was that both the Chron's and Times' alias lists incuded subdomains of one common domain: perfectmarket.com. Perfect Market is an LA-area startup that claims to:

[help] newspapers, magazines, and broadcasters with a web presence and other online publishers grow their revenue with little effort and no risk. Our proprietary technology solution better fulfills the needs of intent users – people who arrive at their sites through keyword searches seeking specific information – with exactly what they're looking for in our customers' online content. Optimized content with relevant ads generates higher click-through rates for advertisers, and dramatically more revenue for publishers and their ad network partners.

That glowing description does seem to fit the prosaic implementation discovered by Ms. Blue, so it seems safe to conclude that Perfect Market is the technology and services partner that assisted the Chron and Times in stripping the original content into its SEO'd counterparts.

Perfect Market is a well backed venture. It has raised over $20m in venture capital, the most recent round closing in February and announced yesterday. Interestingly, this round was led by the bankrupt Tribune Company, parent company of the LA Times. Perfect Market also has solid backing from more traditional VCs, including Trinity, Rustic Canyon and IdeaLab. (Mayfield also has a board seat, though no publicized investment.)

Again, nothing to see here from a legal perspective. The company is selling a service and technology to its MSM clients, who bear responsibility for its operation against content that they have bought or licensed.

There are three business perspectives that do emerge. The first is the potential reaction of authors who find their work used in this fashion, and the consequent ability of MSM sites to work with those with an established byline. Ms. Blue has pretty much covered that by example, so I will pass.

The second is the reaction of the so-far-unnamed party to the transaction: the search engine. The keyword and ad-stuffed dead end pages apparently produced by Perfect Markets's technology are isomorphic, from a search company's point of view, to those created by more questionable tactics such as scraping. The intent is the same: to spam the index. This is the behavior that routinely gets questionable sites shoved to Google's back pages, or banished altogether. One has to wonder just how long this type of abuse will be tolerated, simply because it's being practiced by a recognized media outlet. (And we can note in passing that the irony of an MSM that routinely suggests that deep links are 'stealing' behaving in this fashion is thick enough to spread on toast.)

Finally come the implications for the businesses of the MSM sites themselves. While Perfect Market suggests that what they are enabling is an exhibit of MSM brand power, reality would seem to be the opposite. It should be clear that neither the potential reader nor the original author are going to be happy with the existence of a keyword stuffed, link stripped dead end page. The difference between these pages and those of a more prosaic SEO spammer is simply the brand attached to them, which might entice the reader to click through. It should be clear that the Chron, the Times, and other MSM outlets behaving in this fashion are doing no less than milking their brands to the detriment of long term trust and value. It is a subtle, but telling, exhibition of their desperation.

Update: From a comment by Ben Metcalfe at GigaOM:

It looks like LA Times, Baltimore Sun, Orlando Sentinal, South Florida Sun Sentinal, Hartford Courant, Allentown Morning Call, Virginia Daily Press and the New York Daily News are all using this or looking to.

I Come Not To Praise, But To Bury

Michael Malone call this an 'Obituary for Obituaries', but it's not; it's an obit for an industry. The payload:

...newspapers (and even more obviously, troubled national newsmagazines like Newsweek) have essentially abandoned the news business and gone into the comfort business. In other words, they have a pretty good idea now just who constitutes the heart of their loyal readership, and they write for that group, with the intent of either delivering news that fits their world view or sanitizing bad news that does not. And, since there is no way that they can deliver that information in a timely way – they assume that their readers have already learned from the Web about important events – now it is the paper’s job to reduce any discomfort or cognitive dissonance by contextualize the story into the tribe’s existing prejudices and self-image.

Hmmm, I seem to have mumbled something like that in the past:

Only in the case where the buyer is aligned [with bias] and not searching for ground truth will an increase in value result.... We have just reinvented the party organ newspaper. We might also have invented a way to salvage a decaying legacy business by guiding it into a stable, but ideologically defined niche.

Michael does have senior toldyahso rights, both by date and tenure in the business.

Newspapers' Worthless Readers

Jeff Jarvis heaps some well-deserved contempt on Murdoch's whining about online readers, and then lays out some specific and worthwhile suggestions on how to turn a dud news site into something that can make money. If you care about new media, it's a RTWT.

A Scandal In East Anglia

(With apologies to A. Conan Doyle.)

Breaking, but not in the MSM just yet: A hacker (or leaker) has copied over 60Mbytes (compressed) of e-mail correspondence, documents, data files and programs from the University of East Anglia Climate Research Unit (CRU), the laboratory of Dr. Phil Jones, and one of the primary sources for data and analysis supporting the global warming hypothesis. The zip file has now been removed from the Russian server where it was first posted, but has predictably appeared at numerous other places on the net. Jones has now confirmed that the leaked data appears to be genuine.

E-mails posted in whole or part at WUWT and other sites appear to describe data manipulations that may or may not be misleading. They are, however, quite explicit is discussing how to manipulate the scientific review and publication processes to prevent dissenting views from appearing. With the release out for only a few hours, there's not been enough time for a full forensic or scientific review of the included documents, so we'll have to stayed tuned and cautious. Even if the bulk of the release is genuine, there's always the chance that it has been 'salted'. With literally trillions of dollars at stake with prospective cap-and-tax and other AGW 'mitigations', there is plenty of incentive here for skullduggery.

My only observation so far is that the e-mail release is obviously cherry-picked, given the number of messages compared to the time period involved. Without seeing all, or a representative block of the total messages, we don't know how or why they were selected. The original Russian posting described this as a 'random selection', implying there's more data out there. The implied threat of further release now hangs over the CRU; someone out there may be learning from Breitbart's tactics of dribbling out the damning data.

Update: On Drudge, Fox, Guardian and BBC now. You can amuse/inform yourself by searching or reading the leaked e-mails as long as it lasts. 'FOI' is reputed to be a good place to start.

(More recent posts here and here.)

Blogs Are Simply Beating The Sh** Out Of Newspapers

Says Fake Steve, with a blatant example of the NYT blowing the Zynga story, and then pounds it home:

"They're [the blogs] the ones who still dare to go for the throat, while their counterparts at big newspapers just keep reaching for the shrimp cocktail. As for the newspapers: Faced with their own demise, fearful of losing even more advertising, newspapers have made the huge mistake of becoming ever more timid, more cautious, more in bed with the companies they cover.

It's the exact opposite of what they should be doing. The truth is, if newspapers want to survive they should go back to doing what they started out doing -- muckraking, stirring the shit, calling bullshit. The other truth is, when these papers are dead, they will not be missed."

Amen. HT to Ole Eichhorn.

Caught in the Crossfire

"I sat on TV, while my hero Tommy Smothers yelled in my face how pissed off he was at me for appearing on Glenn Beck. It broke my heart. "

(Via Vanderleun.)

I find this clip incredibly poignant. A man who believes we can still talk about it meets one who's drawn battle lines. In many ways, an archetypal representation of our society in this final year of the 'aughts'.

Rocky Mountain Retrospective

Here are some useful reflections from the editor of the deceased Rocky Mountain News on how and why it died. (Via the InstaProf). Very likely too late to do any good for other newspapers, but John Temple's lessons learned apply to most any established company that finds its market changing rapidly due to forces beyond its control.

Of all the sins in his list, the most deadly is the mental habit of evaluating every move by its impact on the former core business. Not only does it cripple the formation and success of internal ventures, but it forms an obvious constraint that the entrepreneurial minding can alleviate by leaving and setting up in competition. Temple talks about the Rocky's difficulty in retaining its Web staff against recruiting from 'pure plays', the lesson transfer to other industries and markets.

Content As Pawn

If you care at all about the media, take in Paul Graham's latest on publishing. He points out that in spite of publishers' protestations that content is king, industry economics show it's simply be used as a device to sell folded and bound paper, or whichever tangible medium in which it's been fixed. With the content increasingly decoupled from any physical carrier, that business model and the industry built on it approach collapse. RTWT.

If I find any place to take exception with Graham's analysis, it's in his treatment of software. He correctly calls it out as a class partially separated from content in general:

Is software a counterexample? People pay a lot for desktop software, and that's just information. True, but I don't think publishers can learn much from software.... though in form merely information, software is treated by both maker and purchaser as a different type of thing from a song or an article. A Photoshop user needs Photoshop in a way that no one needs a particular song or article.

Great so far as it goes, but software differs in kind from generic content. Software is embodied behavior, performed differently for each task, user or audience. Digital media can be simply a conduit for fixed content, a la YouTube, or become dynamic when contingent behavior in the form of programming is introduced. The software industry has been weaned away from any dependency on physical embodiment over the last 15 years, where the paper and plastic content industries have had their business assumptions 'baked in' over much longer periods, and have begun their adaptions belatedly. The most provocative developments may come from segments, like games, where content, software behaviors, and audience reactions and actions are all intertwined.

The Roving Eye: Green Bubble Sighting, 24 Hours vs. 22 Minutes, Big Iron of Yesteryear

It's not really about energy. How late in silly season does it have to be before you get stories like this? A treadle to borrow a few ergs from autos passing by. Somehow the writer involved (and some franchise owners who let their brands be used) completely missed the back-of-the-envelope analysis that you'll find in the fourth comment to the story, which makes it obvious that this placement is about gullibility, not greenery. Do I have to be a cynic to guess it has more to do with this chart than it does the environment?

And that's the news tonight. Jeff Nolan nails an unwittingly self-revelatory comment from ABC Nightly News' executive producer, John Banner. Banner is mentally stuck in the constraints of his legacy distribution platform, and won't stand back to realize that 24 hour availability is not a problem from the point of view of his former audience, it's a feature. I can't put Jeff's summation any better:

What the traditional news business can’t seem to stomach is that their profession isn’t that complex after all and their historical barrier for entry was not access but distribution, which in our age is not a steep barrier to overcome at all.

Check your six, JB. Regardless of your politics, you've got to respect the launch of Breitbart's Big Government site. From rumor to legislation mover in a week. And talk about 'afflcting the comfortable'. This is going to end up a textbook example for new media launches, up there with the canonical Blair Witch viral campaign.

Speaking of legacies. A blast from 50 years in the past as IIHC crashes a current model car with a '59 Chevy.

Did they get their clunker credit? At least it wasn't a '57, which would be a mortal sin. (Via the Insta-guy. Go back 50 more years, and there's this:

That's the S. S. Keewatin, dating to 1907, the oldest surviving Great Lakes steamer, moored at Douglas, Michigan where we're vacationing and visiting family.

The Future of Reporting

(This is a follow-on to my post regarding Yahoo and AOL's intentions to become media concerns by picking up displaced MSM reporters. While generally supporting the companies' directions, if only as least-bad alternatives, I cautioned that the habits of retreaded reporters might be problematic, if not managed appropriately. Joe Tartakoff poked me regarding that dangling statement, so here's an elaboration. Caveats: I have never worked in or managed a news gathering organization. However, much of the following seems evident from the financial realities of the situation, so I begin there, and end with my estimate of the impact on reporting.)

Grim Reality

The top lines of media organizations are imploding, with print hurt first and worst. How bad is it going to get? Historically, revenue averaged across all media has been about 1/3 subscription. The dreams of some newspaper execs aside, the subscription line is gone for good for many organizations, except in high value vertical niches. The 2/3 of revenue that was advertising has also been shrinking. Much of advertising has already disaggregated from the media channel to, for instance, craigslist, since its bundling with content was a matter of distribution economies that now look like a historical accident. Suppose, generously, that the 50% of advertising that was proverbial wasted is gone for good, and you're down to 1/3 of the former top line industry-wide. Make some tougher assumptions about advertising that moves to dedicated sites and you could easily be down to the future sector running at 10% of the former gross.

As Jeff Jarvis points out, revenue is useless if you can't make a profit. Managing towards internal needs and goals other than net margins have turned print media into a fancy way to lose money. The core of my argument is that AOL and Yahoo may have stumbled onto a good idea because they are natives in the land of diminished top lines, less likely to have accumulated damaging or distracting internal goals, and therefore more likely to be able to fit their expense structure to the reality of revenue.

Consider The Competition

A media business trying to create value and derive revenue does so in the face of alternatives for the reader. With the Internet's demolition of distribution choke points, competition for attention is now global. With media brand loyalty fading fast, the reader or viewer will pick and choose from anything that Google can find. Consider James Murdoch's broadside against the BBC as a confirmation from the industry itself. If you aren't diving into one of Jarvis' hyperlocal niches, your competition is anyone with an IP address and similar content. That's another suggestion that the industry as a whole will end up much smaller - there's no way to maintain margin in a market so grossly over-supplied. If anyone's to profit, the supply must diminish.

The reporter has competition, too. People like me. I've played the computing and communications technology game in various ways for 30+ years. In that time I've met less than 10 reporters/analysts that I would consider really knew the domain. People who if I gave part of a story I could count on to understand where it fit in the grand scheme of things, and know how to go hunt down the rest. (Or who, conversely, I would want nowhere near my shop if I had a story I was trying to keep quiet.) Most of the rest have practiced some mix of people journalism and rearranging press releases, often accompanied by gross naiveté or bias regarding industry dynamics or business in general.

I think that's been a common experience to those in business, technology or other niches. Before the net, it was fairly easy for those in a complex professional domain to say 'Well, this is hard, and you can't expect too much' without making the jump to question the media's expertise and reliability more broadly. The Web in general and blogging in particular blew that up. Real practitioners across the spectrum from law to genetics to criminology to the military can have their own voices if they want to blow off steam or get their messages out unadulterated. Both expert writers and committed readers are out there, and can now meet up. The comparison with the pabulum handed out by the MSM has been stark for those who have made it. That's also competition that has to be beat or co-opted to have a hope of extracting revenue, now that distribution control has been destroyed.

Who Survives?

If I were putting together management guidelines for a new media organization, or giving my two cents to a reporter who wanted to survive the ongoing implosion, I'd have these two at the top:

1. Reporters (or whatever we're to call them now) must know their beats. Not only as a professional goal and ethos, but as a result of management commitment and measurement of the goal. 'Knowing the beat' means not just knowing the people, but understanding the logic of the domain enough to reason in it. Having a point of view on it is useful and perhaps necessary, so long as it is founded on fact and knowledge, not prejudice, and made explicit. This means that management can't be bouncing reporters from one beat to another, and that reporters have to get beyond people and keywords in their analysis. The purely process part of reporting is being incrementally replaced by Google, RSS, twitter - and it will only get worse as time goes on. It no longer creates value.

2. The 'reporter' must now be a participant-observer in the community of interest. Not a community organizer, but a mirror to the community, virtual or real-space. The idea of the 'heroic reporter' who goes out, finds the story, does all the leg work and the writing, is dying. It can't be afforded. The tools that are destroying the old distribution choke point have to be turned around and used to advantage, to observe, cultivate and understand the target domain and its people. It's not crowd sourcing in the full sense of that term, because the reporter is exercising judgement in what to focus on and emphasize, and how to put it within a framework for understanding, but it has common elements. 'Reporting' is going to take on some of the flavor of managing online forums, moderating mailing lists, or editing a wiki page. (Another point in favor of AOL and Yahoo, who have plenty of experience with online community, where many media organizations have been highly ambivalent.)

It seems to me that reporters motivated and weaned on J-school stories of Watergate and the like are going to find it hard to fit in this world. The omniscient voice is just plain gone, and there are plenty of alternate voices to call BS on selective sourcing or political cant. The economics above imply the profession is going to shrink radically. The skill and motivation set for the survivors may be rather different from what attracted them initially, or was part of their training. Double of course for editors and publishers who have even more years of the old ways 'baked in'. That's the long form of my caution on AOL and Yahoo recycling the personnel of the faltering MSM.

Winning

Organized reporting (new style) will have some things going for it. The first is simply being on the job continuously, as opposed to domain experts who have other lives and produce sporadically based on self-motivation. Pulling together those bits and clues, filling in the blanks and backstory, and making it easily available must add value, or the profession is just plain gone. Since as I've observed elsewhere, the best way to learn a field is to watch experts argue about it, that continual contact will lead to beat expertise.

Second, editors and many reporters will have a sense of what will be broadly interesting within a community, or even beyond it. That's hard for someone deeply embedded in their own work in a domain. (I really suck at this. I seem to have virtually no ability to predict whether a superb analytic post (ha!) will just lie there, or something I dashed off in a moment of amusement or annoyance will get picked up and circulated. There's a talent there. A few bloggers, Glenn Reynolds and the like, have it, but I don't and so I feel the need.) Having the title doesn't necessarily convey the sensibility, so the content selection part of editing will continue to be debatable ground between reporter and editor. One might even conjecture that the two roles will collapse together, due to economic pressure.

None of this is novel with me. If I'm adding anything it's bridging between financial realities and organizational implications. And I'm well aware that most of the MSM would claim they've been doing this all along. I give that as much credibility as the claim made back in the day by CompuServe and AOL that we were 'selecting and organizing content for the benefit of the user'. Both we and the MSM were making pious claims while actually tending a distribution choke point. Now it has to be real, or die.