Sometimes its hard to tell if people are trying to be funny, mean, interesting, provocative or are just plain stupid or completely out of touch with reality.  I know I get accused of being all of the above all the time.

The other day in New York I gave a speech at the AlwaysOn Conference which AdWeek summarized nicely here.  The audience was primarily newspapers and people related to their business. So as I do when I speak to a group like this, rather than just shilling a product, service or position as many, if not most keynote speakers do, I try to put myself in the business shoes of the audience. Then I discuss what I would do if I owned, ran or invested in their business, and the approach  I would take to some of the strategic issues of the day.

The concept of directing comments to a vertical segment of a market is nothing new. I have been doing it for more than 20 years. Yet for some reason, based on comments from a few folks over the past couple days, there are some relatively high profile people in the internet business that have a tough time grasping that concept.  Tech Crunch - a site I love. SearchEngineLand – Run by  Danny Sullivan, I think he Danny  likes to banter to create traffic, smart on his part. But I also think he doesn’t fully understand all the business elements on some of the topics he has challenged me on.  Then there is Jeff Jarvis who always like to slam me. Which is ok by me. I just consider the source. As Jeff describes himself  ”Most of my holdings today are in mutual funds because I’m a lousy investor.” Which tells me all I need to know about his business knowledge.

While its fun to make a list of those who have criticized me, the criticism is incredibly valuable.  As a businessperson and one who tries to stay ahead of the technology and business curve, even when it means taking a position that is far from popular, critics serve the purpose of always “making you check your hole card” . In other words, the more a position I take gets challenged, the smarter I get on the position. So the criticism is welcome.

Of course the criticism can be fun for me to challenge and also wrong. Which much of the criticism of my Newspaper Industry speech is.

Danny Sullivan thought he had caught in some hypocritical act because I am an investor in Mahalo, a human powered search engine that leverages SEO techniques to increase traffic and revenue. First of all, I invested in Mahalo in 2006 . Not yesterday as Danny would seem to imply. Nor am I involved in the day to day management of the company.  Im always available to answer questions when they ask. Which they do every so often.

Second, EVERY presentation or discussion of actions I thought the newspaper industry should take ALWAYS had the qualifier that the newspaper had significant amounts of unsold inventory.  My point being that if the traffic Google was sending you was not being monetized and you didn’t see a way to monetize the traffic, it was time to make a business decision reconsidering the value equation of traffic coming from Google or Google News vs the strategic implications of staying in their index and offerings. Topics I discussed in my last blog post.   I also discussed in a prior blog post, but unfortunately didnt have time to cover in my 12 minute keynote at Always On, that twitter and facebook were becoming significant sources of traffic to newspaper sites. A fact  that should be considered in the value equation and which in the long run  could become a threat to Google’s Search and News . (a point Im sure Google has also taken note of )

We increasingly look to friends and/or our social networks as a trusted source for information, and because that information is broadcast to us rather than us having to go find it, and because Twitter and Facebook updates are not going to be competitive threats to the newspaper business,  leaving Google is no longer unimaginable for Newspapers.  In the case of Mahalo, unlike newspapers, they are making good money from Google traffic. No reason to stop doing that.  On the flipside however, its fair to point out that Mahalo does use some newspapers content to support their content.  If a newspaper would ask me if they should block Mahalo, the fair answer would be that there is no reason not to. Like Google, the traffic from Mahalo would not justify the value Mahalo gets from their content.  If the CEO of Mahalo were to ask me how Mahalo should deal with newspapers, I would tell him he should work out a licensing deal with the newspapers. That it would be found money for newspapers, so he could most likely get some level of exclusivity on their content in exchange for a minimal amount of money that would be in the form of an advertising revenue share from  pages that host their content. It would be a simple revenue arbitrage for him while also giving him a nice differentiator that would allow him to promote being an exclusive source of content from companies he worked out deals with.

Moving on to TechCrunch, Michael Arrington asks the question of why I could be so enthusiastic about Techmeme, a site that I use regularly and to which I point to from my blogroll. I think his point is that its an aggregator and as such, shouldn’t I be cautioning newspapers about Techmeme and warning them to opt out of it ?  In response I will refer back to my references about monetizing and leveraging Google  traffic. My rule for ANY site receiving traffic from an aggregator of ANY kind is: If you believe you can create more value from the traffic you receive than potential negative branding implications plus the cost of supporting a potential competitor, then continue with the aggregator. If not, block the aggregator. In the case of techmeme, I dont see it ever originating content from the site. So I would strike the competitive aspect of it.  Nor does Techmeme attempt to index the entire internet looking for sources. Instead, if i understand it correctly, Gabe Rivera, the guru behind techmeme personally cultivates the sources he includes in the techmeme index. Because this is purely a tech driven site, and given that participating sites must be “selected”, I would argue that there actually is brand enhancement to being identified as a source on techmeme.  That said, in the event you think that techmeme is gaining more value from your site, than your site is from techmeme, Gabe offers a “leaderboard” where you can check to see just how important you are to the site.  I am sure that Gabe would be happy to exclude you from the site if that is your conclusion.

The same applies to one of my other investments, icerocket.com .  Icerocket was formed in 2004 to be a real-time search engine.  I wanted to be able to search blogs for information that I thought was important and also have those search results continuously available to me through RSS feeds.  It was and is the most expedient manner to keep up with what the blogosphere is saying about a topic. Icerocket’s strength has always been its ability to exclude spam.  To this day it does a better job than Google or any other search engine that includes blogs at finding and giving you real results. When twitter hit the seen, it was a natural to include twitter results as well.  IMHO, and in the opinion of others, Icerocket is as good or better than any other real time search engine out there.  Should your site stay in the Icerocket index ? That is up to you. If you would like to see your blog posts or tweets gain more visibility, then Icerocket will help you.  We aren’t the biggest, but our real-time search is growing very, very quickly.

Which gets me to the necessary conclusion.   The reality of today’s business world is that there are no absolutes. If I invest in a search index or aggregator, that doesn’t mean I believe every website in the world should be in the index. It means I believe that the business can offer enough value to those it has a relationship with to make that relationship win-win.  Nor does it mean that a company is “evil” or that I don’t like it.  Its real world that you will compete with companies that you do business with.  Superfeedr.com is a business I have invested in for realtime push of information that works with information aggregators and content creators of all types that compete with other businesses I own. So does SMASH , which does cookies for Text Messaging.  So what.

Every business has its own decision making critical path that must be re-evaluated daily. For some reason, many of the internet persuasion seem to think that 2010 is the same as 2009, which is the same as 2008, etc, etc. Its not. Things change. Every business must re-examine the variables that impact their current and future profitability. Your relationships with Google, Mahalo, Icerocket, in 2010 may need to be different than they were in 2006.   This seems like an  obvious conclusion to me, but it apparently isn’t to some.

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One of the key core competencies of a publication is the process of selecting “all the news thats fit to print”.

No one can read every news story.  Instead of even trying to consume everything, we all have a process we go through for discovery of news, information and topics of interest to us.  We have sources we trust for our news and information. It may be a printed paper or magazine, a website, tv news, facebook or twitter updates, or some combination of everything we have access to.

No matter how we get information there is one certainty, there is a finite number of sources we will use.

When someone selects google news as their destination for news discovery it is probably at the expense of another destination or product who aspires to be a “discovery destination”.  But lets pretend it is just an incremental source.  That for a while at least a consumer will both go to Google News and to the website of their local paper.  What is the branding message the consumer is receiving ?

When that newspaper allows itself to be included in Google News it becomes a de facto endorsement of Google News as an acceptable and probably preferable “discovery destination” . The branding message to the consumer is “I dont need to go to the newspaper homepage. Everything the newspaper has  is referenced  here in Google News. So if there is something of interest to me from the local paper, Google News will send me to their site.  I don’t need to go to both sites any longer. I can just go to Google News.

Thats not good for the publication brand and business. They just lost their position as a trusted source where real people make decisions on what content they think their readers will want to discover – to an algorithm.

But wait it gets worse.

When that consumer goes to Google News, it lists the number of sources. You immediately become one of 2,172 articles.   It is never good for a brand to be considered one of 2,000 plus sources. Ever. That makes you a commodity. All that promotion you did saying how good your reporters are ? On its way to becoming worthless. To the consumer there are 2,000 other people able to do the same thing (even though there really arent 2k sources, thats not what the branding message they get from Google)

And the bad news will keep on coming.

As a newspaper or other information source, you can never discount  the very real possibility that Google starts becoming a content creator. Why couldn’t they hire reporters ? Why couldn’t they give their content priority over all others ? More importantly, why wouldn’t they ?

Never happen you say ? See AOL. See Yahoo. Both are now creating original content in huge quantities. I promise you, someday there will be a bunch of Googlers sitting in a meeting  discussing how they can generate enough revenue and profits to increase earnings per share by a penny.  You can bet someone will pull up a spreadsheet showing the increase in CPMs for original content with the trusted Google News brand on it. It will show that by simply hiring a bunch of reporters to create news, with Google’s traffic and the higher CPMs of original content, we can make a lot of money for our shareholders. You are in denial if you think this will never happen.

It was smart to ride the Google wave of traffic when you were able to sell it all.  Things change. Now you can’t sell all your organic traffic, let alone the traffic you get from  Google.  Now the value equation has shifted.  You are endorsing Google News as a discovery destination making their brand stronger by the day.  Google News’ brand value will increase fast enough on its own. There is no sane reason to allow them to co-opt your brand and use it to accelerate the growth of a business, Google News that will very likely be your biggest online competitor

Update: I want to put a qualifier here because some people think this applies to any or all media companies. It doesn’t. This is meant for media companies that have established brands and brand equity. If you are a startup, you should use Google for everything its worth. It can be very valuable.  If you are trying to create or establish a brand, you should use Google.Google News. If you have no revenue, you should probably rethink your choice of professions and /or business, but Google traffic can only help.

For you, every visitor is a good thing and an opportunity to convert that user and build your brand image.

On the flipside if your company name is one of multiple choices that comes to people’s mind when they need the type of information/news/info you provide, then you need to think through just what impact Google.GoogleNews has on your business today and in the future.

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As is the normal way on the internet, people love to read headlines. Of course they rarely read the substance of the article behind the headline. They take the headline and run with it as gospel. This is particularly true of internet video and the presumption by many that the internet will be so vast and powerful that its a foregone conclusion that video on the internet will replace traditional television delivery.

Aint gonna happen.  I can go into depth about it, but my buddy Dan Rayburn does a far better job of it.  He asks the simple question of “how is it the Youtube , with all of google’s resources,. cant solve their buffering problem ? ” Then he answers much of it.

Now maybe Youtube will fix their buffering problem someday, along with the other issues that Dan addresses, but it wont be easy and it wont be quick.

You can find Dan’s work here. Make sure to also read the comments. He does a good job there as well

Let me add a couple other thoughts. There are many that think that video over the internet will “set them free” from having to deal with a small number of big companies (think cable, telco). . If that is what you think, you better think again.  There are maybe 3 companies that can stream to 1mm or more simultaneous users. Google, Limelight and Akamai.  And that 1mm simultaneous users isnt just for your content. That is for EVERYONE’s content and they cant get much beyond 2mm without big problems.  More importantly, if you want to stream your content to millions of users at once, its going to cost you an incredible amount of money.

Which leads me to a lesson for all you netizens who are jazzed up about over the top video.  If you really believe the demand is there and your content will command 1mm simultaneous users , its probably cheaper to pay Directv, Dish Network and Comcast to create a channel for you and let your viewers watch it on tv.

Let that sink in. Its going to be cheaper to have the big traditional cable distributors offer your content to viewers than it will be to reach a large audience on the net. Thats for a one time offering. If you plan on doing it more than once or on a regularly scheduled basic, there is no question its cheaper to do it this way. And the picture quality will be dramatically better.

In fact, that is probably a great business opportunity for satellite, telco and cable companies. Open up times to bid to offer content over their networks. You want channel 1020 on Directv, its X dollars per hour minimum or the best price bid. Here is how you provide your content to us. You can buy marketing from us as well. Directv, Dish, Comcast could make a boatload of extra money offering this service.

And i can give you one more option.  It may be cheaper to go to a movie theater chain and pay them to broadcast the content you want people to see via digital to their theaters. As long as its a slow night and they can sell popcorn, I can assure you it will cost you less than a content distribution network would charge to deliver to thousands of viewers.

Maybe someday over the top video will be a realistic alternative to traditional distribution of content, but its not now and its not this year or next or the next and probably not the year after that

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Google is unquestionably the best at selling advertising on line.  They can sell Text, Display, Video at a level that is unparalleled anywhere.  True ?

The Newspaper industry obviously sucks at doing the same. Eric Schmidt said so in his editorial in the Wall Street Journal.

So why isn’t Google taking advantage of this unique opportunity ? Why not just offer a specially tailored version of AdSense for Newspapers ? They do what they do, create content. You do what you do, generate content and sell ads ?

Makes sense. Wont happen.

Why ? Because of the Google hypocrisy in play.  This argument is no different than the same argument they made with Youtube and the music and film industries.  All those movies, tv shows, music videos on Youtube were GREAT PROMOTION. The music and movie industries shouldnt blame Google if they don’t know how to monetize all the billions of views and impressions Google and Youtube provided the content industry. Right ?

But a funny thing happened along the way. Google  caved on Youtube.  Their message is no longer “if you cant monetize the traffic, tough luck”. Youtube is now sharing revenue with as many music and video content sources as they can. They are even setting up VEVO a satellite music video site built around  Universal Music Group content.

There is absolutely zero chance that the end of this discussion is Google saying “You will take our traffic and like it”.  Google is posturing.  They recognize they have the advantage. Particularly  if MicroSoft/Bing do nothing with Newscorp. Its only a question of how they use it.

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More than a year ago I wrote a post (see below) about taxing stock transactions. I suggested 10c per share on both sides. Some of our politicians are suggesting .025pct.  There really is no reason not to do it either way. Spreads have narrowed in the past several years to pennies from nickels, dimes and quarters. So we know that the market can operate with the wider spreads.  Historically spreads are the profit margin of market makers. Well in this era, who is a bigger market maker than the US Treasury ? They are providing liquidity at every corner, so why shouldn’t they (we) get paid for it ?

Of course like any other government attempt to raise taxes, how they use the money is where they will absolutely screw it up. In this example they want to use half the money to fund a Job Creation Fund.  A government run Job Creation Fund is the ultimate Oxymoron.  Let me offer another post of mine that suggests that we open the doors to entrepreneurs and simplify and cheapen their cost to start businesses. The process of creating a company in this  country has become so burdensome at the hand of regulation, insurance, taxes and administrivia, that we are slowing the true job creation engine that this country needs right now. Instead of the Government funding jobs, if the focus is on job creation, which is what it should be today, these funds should be used to remove all friction to those who start, fund and run companies.

This is from an excerpt from a  post of mine and it is exactly what a smart politician should propose today in order to stimulate the creation of jobs in this country

How to Jumpstart the Economy – Tax Free Small Businesses

Jul 28th 2008 10:13AM

What has impacted my decision on whether or not to start a business is the amount of paperwork involved and the local, state and employer taxes involved. Its complicated and expensive to start even the smallest business in the real world. The real world of course is different than the Internet world. The state of business, and in particular, entrepreneurship in the US has devolved into two worlds, the Internet and the real world.

In the Internet world, all you have to do is setup an account with an ad network, put it on your website, generate some traffic and they send you a check. . No licenses, no tax id, no announcements in the newspaper. It took me minutes. Its exactly what millions of people do as well and its created an entire Internet economy that lives off of Google, Yahoo, MIcroSoft, AOL, Ebay and others. Its the entrepreneurs path of least resistance, which is exactly why most take this route.

Compare that with setting up a real world business. This is from the State of Texas: (Which I am proud to say makes it far easier than most states to start a business).

Step 1:Legal Structure and Registrations
Step 2:Business Tax Responsibilities
Step 3:Licenses Permits and Registrations (Note to State of TX, this link was broken, I had to find the destination page )
Step 4:Business Employer Requirements

As an entrepreneur , I can tell you that working through the requirements of these four steps is scary and intimidating. Why ? Because to merely start your business, you have to deal with lawyers and accountants, which not only costs a lot of money, but more importantly, requires you to trust those lawyers and accountants to make decisions that could have make or break consequences on your business. You may have the best idea with the ability to execute on that idea, but one little snafu by these professionals and your business is down the tubes.

Even worse, if you mess up on any of this, you could get in legal trouble. You could get sued, or find yourself in the middle of some legal nightmare.

Then of course, there is the financial reality of having to pay all of the business and employer taxes and ever increasing insurance premiums.

Which brings us back to How to Jump Start the Economy.

If you want to see an immediate re invigoration of the economy, open the door back up for individual entrepreneurs to enter the real world without fear and without an immediate financial burden that pre empts their ability to be successful.

If we really want to stimulate job creation in this country, take the same approach to small business with 25 or fewer employees that we take to Internet taxes. Outlaw them.

No taxes or license fees of any kind on small businesses with 25 or fewer employees. No employer payroll tax. No state or local taxes. No taxes on earnings. No Payroll taxes.  Nada. Use the money from the proposed taxes on the trade of public shares to fund not only this, but healthcare insurance premiums as well. The business owners and their employees will pay income taxes on their personal income , but not corporate earnings

The only taxes they would collect and remit are sales taxes and of course they would still file personal income taxes on their individual earnings.

Make this available exclusively to owner operated companies and only allow the operator to own and operate a single company (to prevent gaming the system).

The impact on the economy would be amazing and immediate. Those without jobs would be able to work for themselves. They would be able to join together and start companies. They would be able to take risks with far less capital and far less fear of failure.  Sweat Equity would be all it takes to start a business. In addition, we would see many cash only propreiters go legit.

Not only would we see hundreds of thousands of new businesses started seemingly overnight, with millions of new hires, but from those new businesses would come new ideas that hopefully would give us our next engine for economic growth that super cedes today’s ideas.

For Congress, the challenge will be to keep the process simple. A simple no cost, online registration for the businesses, with information about the who, what, where and ownership of the companies so that they can track and help fund them. Which in turn would create the information base from which to fund the state  and local revenue that would be lost. Easy  ? No. But a far greater reward in job creation and growth for the country than the Government creating Job Funds and public works efforts.

In this economy  we should open the door to our country’s Intellectual capital and the entrepreneurial energy that separates us from the rest of the world. Make it easy for entrepreneurs to do what entrepreneurs do, and great things happen. Voters and politicians alike seem to have forgotten what has made this country an economic powerhouse. We need to focus on creating a friction free environment for small businesses. That is exactly what will create jobs

Tax the Hell Out of Wall Street; Give it to Main Street

Sep 30th 2008 9:02AM

Tax every single share of stock that is bought and sold 10 cents per transaction. One dime. If you buy a share of stock, your brokerage pays a 10c tax. If you sell a share, your brokerage pays a 10c tax. 1 share, 100 million shares. Its 10 cents per share.

Of course the  tax will be paid for by those of us who are buying and selling stocks. So what. Here is the reality. If you are a true investor. Someone who wants to own a share of stock in a company you believe in, then its an amount that is not going to impact your investment decision making process.

If you are a professional trader or an institutional trader that trades continuously, then it may impact your decision making process, but only to the point of reducing your returns by a minimal amount. Its not going to change your inclination to trade. If you make 9.9pct instead of 10pct, you aren’t going to stop trading.

Whats the economic impact ?

If the NYSE, Nasdaq, Amex and OTC are trading 2 Billion shares a day, thats $ 200 Million Dollars PER DAY. If there are 260 trading days a year. Thats about 52 Billion dollars a year.

Thats real money.

Of course there has to be some fine print. You could reduce the tax per share for stocks under $5 dollars to 5cents. But i would leave it at 5cents even for stocks priced at pennies per share or less. This tax would act as a protection for investors and traders who get pitched unregulated penny stocks and who are more often than not the victims of rip off artists.

Take this $52 Billion Dollars and ????. I will open it to the floor for suggestions and save my conclusion for a later post.

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Ok,  I am getting bored talking about fox and google.  But as things pop up, like news in the media saying that MicroSoft is trying to entice Fox to “de-list” from Google, I cant pass up posting on it. Particularly when it makes so much sense

Here is why Bing paying Fox to De-list from Google can be a significant first step and can work:

First, Bing doesn’t  need to get the most popular sites to join fox in de-listing. They need the most popular searches in the categories they want to impact.

Bing just has to corner the market on specific categories. If they are  able to corner some little corners, say sites about auto news, by paying bloggers and news sites in this category to go exclusive with Bing, they can trumpet it loud and far that if you want information about a new car, you have to go to Bing because “they dont take Google”. (did Visa’s They Dont Take Amex ad campaign work ?”)

Or they can target to pay sites about mesothelioma and other diseases that ambulance chasers covet and pay huge dollars per click through, or other high paying PPC searches. The advertisers for these categories go where they can get the most clicks. It wont change marketshare, but it could change how the battle between Googe and Bing is fought. If they can win enough categories, all of the sudden they have some bragging rights that set a platform for people to question googles positioning.

Then consider MicroSofts first move on twitter and their investment in Facebook as an indicator they  could be looking to stake out a position in the value of realtime information.

Which makes  the public positions of AP and Reuters and other top news sites all the more interesting. One thing they all have in common ? They dont like the way google has treated them and they all need  money.  To think they wont jump aboard and grab a cash offer from MicroSoft that precludes Google is crazy. For the right amount of money you can get them to shut out Google and restrict downstream access of their content to Google faster than they can say “Google Who?” Thats how bad they need the money AND dislike Google (this isnt just about news, Google Scholar is going after  Reuter’s Westlaw as an example). Just as critical, I dont think it takes a relatively large amount to get them onboard.  Given the volume of news these two companies create, impacting the positioning of Google is not as far fetched as some may like to think.

Many, like Henry Blodgett on Silicon Insider correctly make the point that news from de-listed sites will eventually find its way on to other sites and into the Google Index. But  after how long ?

If Reuters and AP de-list, it will be a lot longer than you think. If you havent noticed the number of reporters generating original reporting is falling like a rock.  Much of the news you think is original content is reposted from Reuters and AP.  If Google doesnt have access to their output, they will have to wait for someone to actually re-write the story, probably after reading it on an AP or Reuters customer site (its called  plagiarism to some, fair use to others) and post it. Without question there will be  a lag time. Which may be all that MicroSing needs.  You can get ALL the news you need on Bing NOW, or you can wait, and wait, and wait for it on Google.

Getting news first has been a position of value that has worked for a long, long  time. No reason to think it might not work again here.

And finally, Google already has a problem in that they do a horrible job of blocking spam in their date sorted results. Removing valid results is going to make their date sorted results look even worse.

De-List a few key sites. Win a few categories. Offer the news first. Make the people you pay to de-list also make Bing their default on site search engine.  You just never know. Stranger things have happened. Like we say in sports. Thats why we play the games

So bing just might have a shot

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Hows that for a title.  Just thought it would be a fun day to rehash some old posts that made me look a little prescient

Today the feds arrested 2 programmers that worked for Madoff. I wrote this in January:

Jan 18th 2009 10:11AM

Im taking a flyer here, but if they were to put me on the case, the first people I would talk to are the software developers.  Somewhere along the line there was a software program written or modified that allowed Madoff to enter the numbers he made up, who they were paying out cash to and would print the checks and  statements.  Its very unlikely that it was off the shelf software because it would be impossible for all the numbers to balance, or he would need to use suspense type of accounts that would raise red flags for even the smallest of accounting firms.

Maybe I have missed it, but I have yet to see an article written or any commentary about the software Madoff Investments used or read about any programmers that have come forward that worked for him. Someone had to outline the details of what they wanted the software to do, and in a scam of this size, could it be anyone but Madoff himself ? Someone had to take that information and either create or modify software to keep the whole mess running smoothly for him.

Find the programmers who wrote the software and you will find out how the whole thing worked.

And as the Google, Murdoch discussions continue, some people have actually started to recognize there might be something to what I wrote in May of 08

Is there anything more fun than sitting around, growing your hair, drinking a Bud while listening to Jethro Tull and pondering how to change the balance of power in the search world and unseat Google ?
Better search ? Too subjective. Better monetization ? After the fact. Better User Interface ? Will we know it when we see it ? A new and different search ? Semantic ? Human powered ? We won’t know till we know.

But what about the Google Index, all the websites that are indexed by Google ? What is it worth to be in the Google Index ? What would you, as a website owner require in order to remove your site from the Google Index and no longer be available when someone does a google search ?

It should just be a matter of dollars and cents and sense, shouldn’t it ?

How many websites would have to recuse themselves from the Google Index before Google Search was negatively impacted ?

Mahalo.com thinks it needs to support the 25k most common search terms in order to be successful. What would happen if MicroSoft or Yahoo or a MicroHoo went to the 5 top results for the top 25k searches and paid them to leave the Google Index ?

A theoretical maximum of 125k sites, but with overlap, probably closer to 100k or less, times how much per site on average ?

The math starts to get interesting. At $1,000 per site average times 100k sites, thats only $ 1 Billion Dollars. The distribution would obviously favor the larger sites, so of that billion dollars, would the top 1k sites take 500k each and the remaining 99k split the rest ?

Given the stakes, why stop at $ 1 Billion Dollars ? Would the top 1k most visited sites take a cool $1mm each, plus a committment from MicroSoft or Yahoo to drive traffic through their search engines to more than make up for the lost Google Traffic. After all, once consumers realized that Google no longer had valid search results for the top 25k searchs, that traffic would most likely go to MicroSoft and Yahoo.

And why we are at it, why not require that these 100k sites switch from Googles Publisher Network to Yahoo’s or MicroSofts ? It would start to earn back the $1 Billion paid out very quickly.

On top of that, in order to grease the skids even further, why not issue advertising credits to the sites that switched off Google ? Its soft dollars, that would sweeten the pot and drive more traffic.

IN essence, its no different that any other content aggregation play. Its paying for content . But, It would take some big ones to go for it and see if it worked. However, without question, every search engine has some number of core sites, that when removed from its index , destabilizes the value of its search.

The question is how many ? What would it cost to get that number of sites to turn Google off and stay off, and would the traffic created as users switch from Google more than compensate for the cost ?

Or would Google recognize the risk and jump in and offer more to websites to stay ?

Sure would be interesting to find out.

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Im going to simplify this as much as possible. I probably should have just included this in the first post. Here are the best and worst cases of Newscorp opting out of the Google Index

1. Best Case: They opt out and see an increase in revenues and commitment to their sites because people choose to go directly to their sites. For those sites behind a paywall, they generate more revenue than when the site was free.   Other sites notice their success and copy Newscorp, choosing to opt out of the Google index. The opt out choice turns out to be the better business move for any and all sites looking to increase revenues. Google’s position as the leading search engine is called into question.  The Search business becomes competitive again. Content companies now understand how to best monetize their content efforts.

Far fetched ? Maybe. But not totally inconceivable.

2. Worst Case: They opt out of Google’s Index. Their traffic drops 99pct. No one buys their pay offerings. They all feel like idiots. Then the last idiot left in the office gets out the text editor and changes the robots.txt file or completely deletes it.  They turn off the paywalls. Make the content free again.  Life as they knew it before they opted out and started charging for content returns to normal as quickly as Google can reindex the Newscorp sites.

The upside of Option 1 is far more impactful than the downside is bad. There is no reason not to take the chance.

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Rupert Murdoch has said that his Newscorp sites are going to block Google indexes.  Of course, all the netizens freak out when this happens. Which I love.

I love to tweak all the internet information must be free bigots. They get so damn religious about information on the net that they lose what little objectivity and awareness of the real world they had in the first place.  First a little enlightenment for all of you that think Murdoch is making a mistake. This is not 1999, nor is it 2004, nor is it 2006, nor is it 2008.  The calendar is about to turn to 2010.  What worked and made sense 3,5 and 10 years ago, no longer does.

What has changed  ? Quite a bit, but lets start with this.  TWITTER IS SURPASSING  GOOGLE as a destination for finding information on breaking and recent news  of all types. Whats more,   TWITTER POSSES NO THREAT to any destination news site. 140 characters does not a story make.  Find it on twitter, link to a story on say, FoxNews and everyone is happy. The same concept applies to Facebook Links. Twitter and Facebook are not news  destinations that can compete with traditional news sources.  Google is.   Rupert loves him some twitter. Google, not so much.

Not only are Twitter and Facebook becoming strong competitors for referrals to news sources from topical searches, they both have one HUGE HUGE HUGE advantage for news outlets that Google does not:

TWITTER AND FACEBOOK are platforms that allow the news sources, like newscorp to post breaking news and gain value from their brand. Google does not.  In other words, if I trust a newspaper, tv or any  brand, I can follow it on twitter and expect the news to come to me.  The concept  of “If the news is important, it will find me” works better by the day.  If it matters to me, chances are very good its in one of the twitter feeds I follow.

Having to search for and find news in search engines is so 2008.

Twitter and Facebook have become the ultimate real time programming guides.  Look at it like this. “Hear about bubble boy from a follow”. If: “its a news source, go to that news source” If not: “Look it up on twitter (or i use icerocket.com it shows tweeter authority) to see if there are any 1st hand accouts or check my FB wall to see what my friends have to say,  if anything”  “See tweets/posts to determine how I want to get more information:  from  TV ( stream, regular, phone), or from online written or audio source” if online: “go to that source from link in twitter or facebook”

All of the above complements everything Rupert and Newscorp are doing.   Google is no where to be found in that equation.

Thats not to say Twitter is perfect. Its not. It has  a HUGE and growing problem with spam (unlike Facebook updates and another reason why I pimp Icerocket.com). Nor am I saying that Google is toast and has no role. Non real time feed users will continue to source news through Google.  I just see that as a declining number in an era where much of our first crack at news is via our phone.  But, perfect or not, the bottom line is that in this new era of twitter, things have changed.

News sites blocking Google ain’t what it used to be.  Rupert is right. Deal with it.

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Just read a great article at the Neiman Journalism Lab site about Google’s plans to help the content industry.  In a nutshell the concept is to utilize Google’s Checkout, their payment system, to enable publishers of news and other premium content to both sell their content as part of subscriptions and/or via micropayments.  What caught my interest was the concept of allowing multiple publishers to work together to offer subscriptions or premium content together.

Could Google convince Newscorp and say the New York Times Company to work together to offer a “super subscription” to their publications online and then divvy up the proceeds on a pre agreed basis, much as they do with advertisers and site publishers ?

Maybe.

It would take a lot of work and a lot of convincing and negotiating to get it right.  Then , even if  you could get these cats and dogs to finally live in harmony , the question would arise as to whether or not Google Checkout has enough users.  RIght now they don’t. Which would mean most users would have to sign up for CheckOut.  Would people go through the process of signing up for Google Checkout in order to participate in these “SuperPublication Subscriptions” ? .

I dont think they would. In fact, while its a great idea on Google’s part, I think Google Checkout has more to gain than the publishers.

That said, this same approach could be a digital media nirvana to Amazon and its users.

Amazon has pretty much everyone’s credit card.  They have a growing user base for Kindle.They already sell digital video downloads and rentals, as well as music.  They even sell good old fashion magazine and newspaper subscriptions.

They have the ability to create  the path of least resistance for users to purchase and consume digital media.

I thought it was a good idea for media conglomerates to package all their digital assets into subscription offers.  Its a far better idea for a marketer like Amazon to package cross company offerings into bigger and better packages.

While their Kindle revenue shares , IMHO, are far too beneficial to Amazon, if they can work out a fairer revenue share for Kindle distribution, things could start to get very interesting.

Across all the digital assets that Amazon sells, the packaging and marketing options are endless.

Like the freemium approach ? ,Package the USA Today, NY Times, Wall Street Journal, Financial Times, Investors Business Daily into a single price subscription for Kindle Delivery.  Price it a big discount for the first 3o days, with an automatic expansion to full subscriptions at a price that is a discount to their individual subscriptions. With Free Website Access included.

Want to make the bundle more attractive ? Bundle in a movie download. A book delivered to Kindle. Music. Software.

When they come up with even better ideas, Im sure the Publishers, Movie Distributors, Music Distributors, Software Vendors  will be more than happy to give you OEM prices if you commit to minimum quantities.

In fact, it could be even more interesting if Amazon took a page from Google and allowed Marketers to bid on digital content to include in subscriptions, product bundles or one off sales and then market and resell them.

Think of the ecosystem of content sales that could be created if Amazon (or EBay or Google) created a “wholesale” market for content where marketers could bid on 100 annual Wall Street Journal Subscriptions , 100 Downloads of the movie Wall Street, and 100 copies of the book “Random Walk Down Wall Street” to be sold as “Graduation Gifts for Business Majors”

Lame example, but you get the point.

In a world where the marginal cost of delivery of digital content is almost zero, why not throw it out there to be bid on so that great marketers can come up with great marketing and sales programs ?

Why not take those marketing and sales programs and offer them for sale right on Amazon ? They already have a wholesale sales program that  leverages their marketing, order processing and  physical fulfillment advantage for 3rd parties. Why not create the same type of program specifically for digital media and the same Amazon advantages, as well as  their cloud services to let anyone who wants to participate quickly create a digital media store?  This could be the ultimate market for digital media.

Its hard to find ways to sell content, particularly content in any one silo, be it news, sports, business, etc. When you start looking at how to package any  digital content into products and letting the market help set pricing, things could get very interesting very quickly.

Ebay allowed products to be aggregated and sold by anyone. Google allowed anyone to quickly and easy buy advertising and reach a huge audience.  Both based on an auction system. An Amazon Media Market could create a bourse  that leveraged the vast amounts of creativity out there to  find new ways and models to sell digital media.

It certainly could not make things any worse…

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