This bubble stuff feels eerily familiar

Celebrating after the AOL Time Warner mergerI was sitting in a conference room at the hi-tech incubator BizTech in Huntsville, Alabama with hopeful eyes fixed on the TV. It was January 10, 2000, and on the screen was the press conference during which the AOL and Time Warner merger was announced. I remember it like it was yesterday. Here I was trying to raise a million dollars for my own start-up, ANSIR (A New Style In Relating), and these guys were talking about a merger valued at $350 billion. AOL itself was valued for the deal at $165 billion. It was then and remains the biggest merger in business history.

I remember the excitement and the wonder of it all. Little did we know it was all just part of a big market bubble, and I remember especially this provocative line from Time Warner CEO Gerald Levin, a very sane, important and knowledgeable businessman at the time.

“I accept that something profound is happening in the Internet space; I believe that. The new media stock-market valuations are real – not in every case, of course. But what AOL has done is get first position in this new world. Its valuation is real, and I am attesting to that.”

Levin’s attestation would later be proven wrong, and he would be forced out as the merged company shriveled under the blended brand. It is now a case study in why what Levin said is a bad reason to take such an enormous gamble. Walt Disney built his empire with what he called “the plausible impossible,” and I suspect that was at work here. Logic is great, the old saying goes, unless you begin at the wrong spot. Believing the valuations was what grew the bubble. Turns out that if it seems unbelievable, it probably is.

I’m recalling this today, because I’m feeling the same vibe as Facebook is about to approach Wall Street with an IPO valued at $100 billion, a valuation that’s roughly 100 times its earnings from last year. It sounds and feels oh so familiar.

So are we in a bubble? The always astute Mathew Ingram has a nice overview of the subject today that’s worth a read, although his conclusion tends to support those who feel we’re not.

So while some venture funds may be doing their best to inflate expectations and cash in on high valuations, that appears to be causing problems only at the small end of the startup pool — for now. Without any obvious signs of a public-stock mania that puts individual shareholders at risk, it’s hard to argue that we are in a 1990s-style bubble yet (although some critics fear that the new crowdfunding bill could accelerate the problem). Whether Facebook’s IPO triggers a broader inflationary atmosphere remains to be seen.

Dave Winer says we’re “definitely” in a bubble, and I believe him. I mean, look at the evidence. AOL’s model was based on a pre-Internet business model, one we know of as mass marketing. They could make tons of money, if they could just keep people inside their walls, a “walled garden” as many would later call it. When the fickle public disagreed, a new garden called MySpace sprang up. This social network could make money the same way, and for awhile, things looked good, until a young guy named Mark Zuckerberg took over with his Facebook. So here we are again, and the whole thing still hinges on the same value proposition, that Facebook can somehow keep those people within its walls. Old school media value, after all, is about controlling the infrastructure for content, whether its made by the New York Times, Zuckerberg or Joe Blow.

And for the last few weeks, we’ve been treated to justification and rationalization that Facebook is somehow different than its predecessors. The company paid a billion dollars for Instagram in what most (myself included) feel was an overpriced grab at real estate Facebook needed to be inside its wall instead of outside. But is Facebook substantially different that previous walled-garden approaches? Get real. It may have a few more bells and whistles and connections, but the core competency is the same. Web research and consulting firm BIA/Kelsey is hosting a webinar on the topic this week to probe this specific issue:

…questions continue to swirl about its (Facebook’s) actual worth and whether any company can justify becoming public at such a high value. The prevailing question: How will Facebook support this valuation…?

I don’t believe it can be justified, although lots of smart people who’ve doubtless done their homework will try to explain that it is entirely justified.

I’m sure Mr. Levin had done his homework when he made that infamous statement back in January of 2000, but at some point in a gamble, you must consider that you could be wrong, partly or as the AOL Time Warner deal proved, utterly and completely. So in addition to homework, what say we also consider common sense. We could also ask a few teenagers.

“Everybody’s switching to Twitter,” a 17-year old family member told me. She used to be a pretty regular user of social media, but her activity has been shrinking for the last year or so. She doesn’t need Facebook anymore, and besides, “it’s pretty lame.” Think about that for a minute. It’s AOL all over again.

“To everything is a season,” we’re taught. I wouldn’t bet on Facebook’s future if you gave me the money with which to do it.

Driving traffic (that doesn’t want the ride)

Nobody wants to be drivenThe new Pew study revealing that media companies use Twitter almost exclusively for spreading links to their own content comes as no surprise.

…mainstream news organizations primarily use Twitter to move information and push content to readers. For these organizations, Twitter functions as an RSS feed or headline service for news consumers, with links ideally driving traffic to the organization’s website.

Back when Twitter first came along, I predicted that media companies would immediately become big users, because they could easily see it’s one-to-many functionality. It’s what we know and what we practice. The strategy became:

  1. Get a lot of followers
  2. Feed them breaking news and weather
  3. Feed them promotional content
  4. Feed them stories, many stories
  5. Put a link in everything

Twitter is a terrific notification system, so it’s hard to blame media companies for this practice, but it points to a serious weakness that media has today: its mission can’t help but come across as hypocritical. What appears to be one of disseminating information and being society’s watchdog is actually a commercial mission to make money. There’s nothing inherently evil about that, but think about it. If influencing public life is the goal, then readership is what matters, and there are many ways to efficiently deliver unbundled content via the Web. When forcing people to read our content within our infrastructure, then it’s clear that monetizing that content is more important than anything else.

Using Twitter this way is easy, but it’s also lazy and sells short a tool for newsgathering and news dissemination. When I talk to clients about Twitter, the stumbling block question is always “How many people do YOU follow?” The answer is simple — none or very few. This means that Twitter is to them, in fact, nothing more than a notification system.

However, some individual employees of news organizations use Twitter in a myriad of ways, including to participate in its unique discussions. These employees seem aware of the new reality that their personal brands are everything in the world that’s ahead, so they participate in social media. These smart people may include links to their work as well, but that isn’t necessarily the sole purpose of their accounts. It gets very tricky for some media companies when they try to control the personal accounts of employees, because they cling to the notification system paradigm and the ethical (and profitable) mechanism of an opinion-less stage.

Twitter is also very useful on mobile device, so the practice of only spreading links — that then lead to a fully-packed website and not an HTML5 landing page — is ultimately self-defeating. This is a different playing field with different rules, and we risk our own relevancy by insisting that it’s best used to drive traffic to our advertiser-fed websites.

And nobody ever asked to be driven to such a place in the first place.

Think “Landing Pages,” Not Websites

Here is the latest in my ongoing essay series, Local Media in a Postmodern World.

Think “Landing Pages,” Not Websites

The mobile web era has ushered in a new way of viewing media of all sorts – the landing page. The growth track is unmistakable. More and more people are accessing our content by mobile links, and our attention needs to be where that interaction takes place. Mobile landing pages include all of the touch and swipe attributes of the devices on which they’re consumed, and we need to be considering this from a strategic perspective instead of just another way to display content from a centralized location.

Media 2.0 101: The technology beat isn’t optional

the technology beatI’m going to leave the world of technology for a bit today to talk “about” the world of technology, because I think media companies are missing a big, ongoing story, simply because we’re a part of it. An entirely new media industry has birthed, blossomed and produced fruit within the last 15 years, and its coverage area has expanded to the point where mass media companies have no choice but to get onboard. I’m referring to tech media and its grip on information about the most amazing phenomenon of the new age.

We view technology only as a way to make our jobs easier, but that’s a little like putting electric lights on a ship designed to hunt whales for the lantern oil industry. Technology is far more than “our” tools; it’s the biggest story to come along since the printing press, yet we somehow manage to either completely or mostly ignore it.

This is vastly oversimplified, but tech media began as a way for certain geeks to inform other geeks about innovations in technology that might interest them. This spawned an immense field of geek celebrities, such as Robert Scoble, Michael Arrington, Nick Denton and a host of others, and produced some real winners in terms of new media companies, like TechCrunch, Gawker, and thousands of specialized blogs. Tech media is also producing hybrid news and information models, like Duncan Riley’s The Inquistr, an eclectic blend of news that shouts “relevance” to its audience. The Inquistr includes sports stories, celebrity gossip and other mainstream items, which is to say that it crosses over into more of a mass media model with a proclivity towards technology.

News about technology now impacts people far beyond its original intent. And as we watch device after device and technology after technology cross the magical 50% threshold in terms of consumer adoption, it’s crystal clear that the demand for this kind of news and information is headed up, up, up. Do I buy from Apple or Microsoft? Is the iPad worth Apple’s restrictions? And what about my smartphone? What to believe, is the issue, and, even more importantly, who to believe.

Technology is a beat that moves with the speed of light, leaving magazines that used to own the niche struggling in the collective dust of online organizations that are nimble, fleet-of-foot, flexible and adaptive. Even its TV commercials emphasize the point that today’s state-of-the-art is tomorrow’s relic. And then there’s the money involved. Telecoms spend a fortune trying to hook customers into this contract or that one, because so much is at stake. Cable and satellite TV companies are on edge, as TV is now delivered “over the top” (OTT) directly to consumers. News is available at the fingertips of anybody, and traditional media companies are on the wrong end of innovation.

This has all led to what I view as an industrywide ignorance about what’s taking place, and this is fatal in terms of delivering news and information that’s relevant to people. What’s relevant? Technology! And yet, we don’t consider it to be our task. This has to stop, because there really is a lot at stake for readers and viewers and potential readers and viewers in this arena.

What kinds of HDTVs, for example, do TV station engineers use and why? Don’t you think that knowledge might be something that those shopping for HDTVs might want to know? What about cameras, etc? My colleague, Ken Elmore, produces a weekly segment for our newsletter called “Tools of the Trade,” and every week I say to myself, you know, everyday people would be interested in this, too.

Why are we so silent about a beat that impacts so many people in so many ways? I think it’s because we’re smack dab in the middle of it. We’re being disrupted by it, and our need to play defense blinds us from the common sense we need to aggressively go after this kind of news and information. We need to spend time studying the comments of stories posted in tech media, or spend a day just looking at comments of Robert Scoble’s massive following on Google+.

The lions of the tech industry — people like Steve Jobs of Apple, Mark Zuckerberg of Facebook, or Sergey Brin and Larry Page of Google — make enormous impact whenever they open their mouths, and yet I’d wager you’d find that most people in a typical newsroom don’t know who they are. New product launchings are BIG news, and covered by tech media with the same enthusiasm and resources of a Presidential news conference. And rightly so!

Where are we during these events? We’re getting video of the traffic accident up the street or interviewing some poor victim of a horrible tragedy somewhere else. Why? We ignore what’s important to people in the name of doing things as we’ve always done them. This makes no sense.

If you want your local media company to find relevance with the people you hope to serve, you’re going to have to start viewing their lives from their perspective and not your own. Technology is THE story today, so much so that many very smart people are calling this “the second Gutenberg wave” or something similar. Imagine that? It’s an actual turning point in the history of the West, and we’re nowhere to be found in covering it while it’s actually happening.

Gutenberg got a similar treatment back in the 15th Century from the Roman Catholic Church, because only THEY could publish the Bible. Wouldn’t you know that an upstart group of people would actually USE Gutenberg’s invention to swat such nonsense into reality. The same thing is happening today, only we have the chance to be smart about it rather than end up in the waste heap of what’s left behind.

Technology IS the news in the 21st Century. Please. Jump in with both feet.

Why I’m abandoning TechCrunch and Techmeme

Farewell TechCrunch and TechmemeI’m separating myself from two old friends today, and it’s pretty painful. TechCrunch and Techmeme have both served me well over the years, keeping me informed on the cutting edge of news in the tech sphere. I can honestly say that these two websites have played a major role in my knowledge level, and I will miss them.

However, I can’t keep up with either. My RSS reader is overwhelmed with the stuff they crank out, most of which, frankly, is completely useless reading.

There is this belief in media that more is better. More produces more page views, and page views produce revenue, and so it goes. But this strategy disrespects customers, because I simply don’t have the time to keep up. And rather than stare at 100 unread items a day from each, I find myself simply marking them all as read and moving on.

Twitter is more than capable of keeping me connected with what’s really important.

I’m not sure if there’s an answer. Perhaps if Michael Arrington would personally oversee a specific RSS feed of “important” content, I would subscribe to that, but as of this morning, I’ve dropped both of these sites, along with The Inquistr, from my RSS reader.

Maybe it’s a sign of changing times. I don’t know. The only thing I do know is that time is the real scarcity in the life of any consumer today, and tactical revenue maneuvers designed to capture more of that scarcity cannot possibly win in the long run.

Farewell, old friends. Farewell.

A curious birthday indeed

It’s official. I’m an old fart.

My family is out of town celebrating the birth of our grandson, so I’d planned to spend a relaxing day at home Saturday writing. I know it’s technically “work,” but it’s also my passion, so it sounded like a good idea. We had planned a Skype session from the hospital later on, and I was looking forward to that.

I fired up my HP dv6t, and Microsoft informed me that it was downloading and installing Windows 7 Service Pack 1 (SP1), which is a bunch of little things put together in one package. Fine. It happens all the time. My day began its torture after the restart. I could not access the Internet. I could send and receive email, but I couldn’t access the Web to save my life.

I called Time Warner first and spent some quality time with a fine man from Manila who spoke perfect English. We tried everything. He tried everything. I got out my HP netbook and tried that. Bingo, it worked. “It must be a problem with HP,” was the conclusion. He gave me their number. Alan, another nice guy from the Philippines took my call. Before I could speak with him, though, he had to check my warranty and told me it had already expired. I would have to buy a service contract before he could even talk to me. I explained that the computer was purchased by my employer with the stipulation that I bought an extended warranty, and that I had certainly done that. Nope. No record. “If you can give me the order number, I can verify it,” Alan said.

I’m now starting to get angry, because my wife is the only person who could find such a document, and she’s in Vir-fucking-ginia. I’d have to find the receipt later and ask for a refund.

After some unkind comments, I spent $100, and Alan began walking me through things. He asked if I had a back up of my important stuff, which didn’t sound good. Our efforts took forever and accomplished nothing. At one point, however, after some background Windows program had run, Microsoft informed me that it needed to reload SP1. Fine. Maybe they screwed something up the first time, so I thanked Alan and got down to business.

The reinstall went smoothly and the two error messages I’d received after the original restart disappeared. I was joyful and suddenly able to get online. Victory!

But it was slow as molasses! I mean dail-up slow. I did Speakeasy tests and determined I was getting about 4 megs down and a half a meg up. It seemed much slower, however. Everything on the computer seemed slow. I grew impatient, so I went back to the netbook and repeated the Speakeasy tests. Same results, so I called Time Warner back.

This time, it was Rose in Manila. It took forever. I had to put my phone on the charger. She did some tests and finally found something. Then, she told me she’d have somebody out to fix it on Wednesday. That’s right, Wednesday, as in 5 days away.

I got a little more angry. How a company like Time Warner — whose very lifeblood is its customers — can treat people like this is all the evidence you need in order to accept that something is terribly wrong with our culture and its economy. I yelled at her and demanded to speak to a supervisor.

She said I should speak with the “local” office, which made my eyes light up. Then, she transferred me. I was now speaking with Mae in El Paso (hardly local). May felt compelled to have me start at the beginning, which really infuriated me. She was a sweet thing, but she kept wanting me to try things I’d already been through, including hardwiring to the modem. That bloody well didn’t work. She insisted that Time Warner was sending a signal to me, something I already knew.

She apologized but said Wednesday was the soonest. I hung up and yelled at the dogs.

My wife called. I yelled at her.

Then I called my friend Richard Andrews, a computer repair guy who has helped me out in the past. He could sense my anxiety and said he’d be over as soon as he could. The guy lives in Keller. I live in Frisco. It’s about an hour’s drive.

Richard arrived about 7:30 p.m. and said he’d never seen such a thing. His first thought was to uninstall SP1, which took about 30 minutes. Bingo, everything went back to normal. He then hid the update, so that I would never install it again, and went his way. It cost me a few bills, but I was happy to pay. Richard went above and beyond with me, and I couldn’t help think that this is the way all those who service the industry need to behave. I guess that’s why his business is booming. If you live in the DFW area, you simply won’t find anybody better.
Geek friends reading this will say, “I’d have uninstalled SP1 right away.” Good for you. I was simply unable to put 2 and 2 together and come up with that solution. After I got back online, I researched the problem, and, lo and behold, I’m not alone.

Windows 7 is a great improvement beyond its predecessors, but Microsoft is still Microsoft. Damn them!

So I’m 65 now, and I don’t think I’ll ever forget this particular birthday. Maybe that’s what this was all about anyway: Life tapping me on the shoulder to remind me of my own powerlessness in the overall scheme of things. The most important thing about my birthday, after all, was that the circle of life twitched, and new life came into mine just one day earlier. I missed my Skype session, but that’s tiny in comparison.

Kinda puts things in perspective, eh?