Time-Warner to AOL: I just can’t quit you

Recently installed Time-Warner CEO Jeff Bewkes is apparently kicking ass and taking names over at the struggling media and entertainment giant, talking about cutting costs by 15 per cent and restructuring the conglomerate’s cable division — but for some unfathomable reason, he still can’t bring himself to say that TW is planning to dump the declining AOL Internet access business. All he will say is that the company is splitting AOL into the access business and the content business, so as to “increase the strategic choices” available to the company.

Strategic choices? At this point, the only strategic choice for Time-Warner when it comes to AOL is the choice between whether to use a .45 pistol or a shotgun to administer the killing blow. I realize that when you’re a big-time CEO running a gigantic corporation with many moving parts, you can’t just come out and say “We are selling this dog,” but come on — everyone has to know that this is coming, right? AOL has been shedding subscribers by the millions every quarter for as long as I can remember. The access business is dying, and the body has already begun to smell bad.

If anything, the death of the access unit is the easy part. Sell it for parts to an income fund or someone who wants to play the declining margins game, and then move on. But the content business is a bit more problematic, as Cynthia Brumfield wisely points out at IPDemocracy. Although the shift from walled garden to free and advertising-supported content has been a relative success for the company — in the sense that advertising revenue has been growing — it still hasn’t come close to making up for the revenue that AOL gave up by making the shift.

Facebook: Weeding the app garden

I’m glad to hear that Facebook is looking at ways of fine-tuning its growing garden of apps and widgets (or perhaps jungle might be a better word). According to Marshall Kirkpatrick at ReadWrite Web, the social network is tweaking the way that apps and widgets can send updates or alerts in the site’s newsfeeds. In effect, Facebook will let apps that have a good success rate — that is, either new installs or clickthroughs on their existing events — send out more, and those that fail to pass those tests will be restricted in the number of alerts they can send out.

A post on the Facebook developer blog says that apps were previously restricted to an upper limit of 40 notifications per day. I think this move could have a couple of different outcomes: On the one hand, it should cut down on a lot of the noise that shows up in Facebook’s newsfeeds, about people becoming Zombies or rating different movies, or taking this or that quiz. But at the same time, it will increase the likelihood that a “good” app becomes even more successful, since it will get a correspondingly larger share of the newsfeed event market.

Want to buy a video-sharing site?

According to a story at CNET, things aren’t looking so hot at Revver, the video-sharing site that made its name by paying video creators based on the traffic their clips generated. More than half of the employees who worked there 18 months ago are now gone, CNET says, and the company has reportedly been shopping itself around for the past few months. Asking price: Less than half a million dollars (plus the assumption of debt). This for a company that raised almost $13-million in funding.

I was a fan of Revver’s model early on, because I thought it made sense to compensate video artists whose clips drove a lot of traffic to the site. Among the beneficiaries of this model were video artists such as the Eepybird team (the guys behind the Diet Coke and Mentos videos) and the Lonelygirl15 project, as well as a range of other artists, including the Ask A Ninja guys and the creators of the “Will It Blend” videos. Liz Gannes at NewTeeVee has more background on Revver.

One of the controversial aspects of a site such as YouTube is that it makes bundles of cash from the ads that top-rated videos bring, but until relatively recently the creators of those videos got nothing out of the deal. The company has since expanded its “partner” program to include top-rated video artists, which is a nice change. And maybe the fact that it has done so — and that YouTube is responsible for a vast proportion of the video traffic on the Web — was enough to make Revver irrelevant.


Ashkan Karbasfrooshan of HipMojo has a great overview of the video scene.

When the cat’s away, the mice…

I think Marc Andreessen — as usual — puts his finger on something important in his post on how the Microsoft-Yahoo merger (assuming it actually goes through) will affect the startup climate in Silicon Valley or elsewhere in the technosphere. Among other things, he points out that Microsoft, Yahoo and even Google don’t really account for a huge number of takeovers of Web startups anyway, once you get past del.icio.us and Flickr and a few others. But that’s not the big point.

I think the killer point is that while the elephants are mating (as I think my friend Paul Kedrosky described it), the field will be more or less completely open for Web companies to do whatever they can to develop a killer service or own a particular segment of the market, without having to worry about a gigantic beast lumbering into their business sector and squashing everything in sight. As Marc describes it:

In practice, that will be two years in which both Microsoft and Yahoo will most likely be considerably less aggressive on rolling out new products and new initiatives — because the key people at both companies will be consumed with the merger.

And, just think, if they are buying fewer companies as a consequence, that also means they’re less likely to buy one of your competitors and come after you while you are building your thing of value.

Marc has some other great points as well, including the fact that building a company just to get acquired is a dumb thing to do anyway, and rarely works out the way you want. In fact, building a company because you sense an opportunity or a need or a hole in the market — without focusing on getting acquired — is a far better way to actually ensure that you get acquired. Take your eye off the destination and focus on the journey, and pretty soon you will find that you’ve arrived.

Video interlude: Grand Central freeze

Everyone has probably seen this video already, but for those who haven’t it’s a really nice introduction to a group I’ve been following for awhile called Improv Anywhere, which sets up elaborate events that fall somewhere between performance art, pranks and general public hilarity. In this one, over 200 completely normal-looking people walked into Grand Central Station and then froze in place at the same split second, and remained that way for five minutes — at which point they all continued on their way as though nothing had happened. It’s quite fun to watch. Some are in mid-step, one is tying his shoe and another has just dropped an armful of papers.

[youtube https://www.youtube.com/watch?v=jwMj3PJDxuo&rel=1&w=425&h=355]

There’s a somewhat similar group based in Toronto and New York called Newmindspace.com, which has occasional events including a pillow fight in Nathan Phillips Square, and a light-sabre battle. In their most recent, the group pulled together a group snowball fight in Trinity Bellwoods park, which Torontoist captured on film (or data card, or whatever).

The Industry Standard: A metaphor

There’s lots of chit-chat this morning about The Industry Standard — one of the leading lights of the tech publishing business during the first bubble — relaunching as a Web-only publication, something that was expected to happen in December, according to a report from the always reliable Rex Hammock, but didn’t wind up taking place until now. The site will be using outside contributors such as Matt Marshall of Venturebeat and Fred Wilson of A VC, and it also has an interesting “prediction market” feature that should be fun to watch as it develops.

The thing that really struck me about the new Industry Standard, however, is how much it is a metaphor for the evolution of the magazine industry itself. During the boom times, magazines like The Standard and Wired were the size of a phone book — despite the fact that most of the stuff they wrote about was on the Web. I remember bringing the magazines to my desk and painstakingly typing in Web addresses. Now, whatever I read about tech comes from Wired’s website, but also TechCrunch and Mashable and GigaOm (welcome back, Om) and Techmeme.

It may seem as though the new Industry Standard is deliberately setting their sights low, as Peter Kafka describes it at Silicon Alley Insider, with just one full-time employee and a lot of outside contributors. But in many ways, I think the new Standard (and Silicon Alley Insider itself, for that matter) is a lot closer to what “magazine” publishing should be like — and is like — now than the old one. I wish them luck.

Yahoo Music: Trading bad for worse

Yahoo has been saying for some time that it was planning to euthanize its music subscription service, but it wasn’t clear what it would replace the service with. Now it has become clear: Yahoo has sold the operation to Real Networks and will be migrating users to the Rhapsody service — although they will apparently get a couple of months worth of the lower Yahoo price before they have to cough up the $12.99 a month for Rhapsody. I’m sure that will make them all feel much better. Ian Rogers of Yahoo Music has more on the move here.

Although Rhapsody has a free, ad-supported version of its subscription service, the main offering is a paid streaming model, and both the free and paid services are of course all wrapped up in some tasty DRM. But the biggest problem with Rhapsody — and with Yahoo Music — is simple: Most people don’t want to stream their music like a radio station. They want to download it and do whatever they want to with it. Period.

That’s why Yahoo is dumping its subscription service in the first place, because it wasn’t working (Yahoo is doing some other interesting things with music, which I wrote about here). And Rhapsody only has about 1.5 million users of its music service after four years of operation, which isn’t much to write home about. Of course, the Yahoo Music switcheroo is in question — along with virtually every other aspect of Yahoo’s business — because of that takeover offer from Microbeast.

Yahoo and Eli Manning: The big getaway?

Having just watched New York Giants quarterback Eli Manning defy the overwhelming odds against him and evade a quarterback sack to make a 32-year pass that helped swing the tide of the game in his favour, I can’t help but think that Yahoo is looking for exactly the same kind of Hail Mary pass to get out of the embrace of Microsoft. In this scenario, Steve Ballmer is the gigantic defensive lineman who is bearing down on Yahoo like a freight train with legs, and he already has a grip on Yahoo’s jersey.

But does it make any sense for Yahoo to cut some kind of search-related deal with Google, or use Google to help finance a News Corp.-led deal to try and foil Microsoft’s dastardly plan? I’m not sure it does. Being absorbed by the Borg may not be the kind of thing anyone wants, but management by a private equity fund is no picnic either, and contracting its search division out to Google isn’t going to solve anything. Yahoo is still going to be stuck with a pile of lame assets and no strategy.

Meanwhile, Henry “I used to be a famous Wall Street analyst” Blodget over at Silicon Alley Insider says that he thinks Yahoo should avoid a takeover by Microsoft, and instead convince Ballmer to cut a deal in which they combine their Internet assets and Microsoft takes 51 per cent of the combined company. There are only two things wrong with that idea: 1) It’s dumb, since it would mean that Yahoo would be controlled by Microsoft anyway, and 2) Ballmer would never agree to it.

Kevin Kelly: What can’t be copied?

Former Wired editor Kevin Kelly has a very perceptive essay up that is apparently part of a book he’s working on called Technium, and in it he describes the Internet as a giant copying machine — a network that distributes information far and wide, and in the process of doing so copies it over and over, creating an almost endless supply of identical copies, all of which effectively cost nothing to produce.

Our digital communication network has been engineered so that copies flow with as little friction as possible. Indeed, copies flow so freely we could think of the internet as a super-distribution system, where once a copy is introduced it will continue to flow through the network forever, much like electricity in a superconductive wire.

The problem, of course, is that giant industries — music, movies, media and entertainment in general — have been created based on the idea that copies are scarce, and that control over the methods of distribution of those copies is the key to wealth. What happens to those models when copies are readily available and free? This is something Mike Masnick at Techdirt has also written about — the economics of abundance. How does that work?

Kelly argues that when copies are free, you have to focus on what can’t be copied. Trust, for example, which has to be earned over time. He has a list of eight qualities, or elements of intangible value that he calls “generatives” — things that have to grow over time and can’t be copied, and therefore should (theoretically) be worth something. They are:

— Immediacy
— Personalization
— Interpretation
— Authenticity
— Accessibility
— Embodiment
— Patronage
— Findability

I think Kelly has put his finger on something important. Each of these qualities is going to be worth different amounts to different people at different times, depending on their needs, or wants, or moods. It makes things somewhat more complicated than just charging people when they go through the turnstile at the movie theatre, or when they buy a physical product, but in the long run I think they could actually create more value. It’s worth reading the whole essay.

New York Times vs. blogs: wrong question

Alexander Rose at The Long Now blog has a post about how the foundation has determined a winner in the 2002 wager between Dave “I invented blogs” Winer and Martin Niezenholtz of the New York Times. The bet was whether a search of the top news stories from 2007 would produce more results from blogs or more from The New York Times. According to Rose, blogs won — although he also notes that the bet was poorly worded, and therefore ambiguous in many ways.

I think the bet was more than just poorly worded, however. The whole idea behind was flawed to begin with, and is even more flawed now. The wager pits blogs against the New York Times as though one is somehow a replacement for the other. That may have made some sense in 2002 but makes very little sense now — especially since the NYT and plenty of other mainstream media have blogs of their own.

Let’s recap: Blogs and media are not opposing forces. Blogs aren’t replacing “mainstream media,” they’re enhancing it and expanding it — connecting it to the conversations that are going on around it and through it and with it. Blogs take stories and commentary from the traditional media and extend them out into the world. Arguing that blogs will replace the traditional media is like saying forks are going to replace spoons.