Rupert Murdoch: Still at War With the Internet

If News Corp. founder Rupert Murdoch and the Internet were friends on Facebook, their relationship status would say “it’s complicated.” While the billionaire media mogul no doub realizes that the Internet has huge potential as a medium, he has spent the past few years failing repeatedly to take advantage of that potential, misunderstanding how the Internet works, railing against its most powerful features and doing everything he can to avoid using it properly. The latest in this parade of bad ideas is the iPad newspaper he is supposedly working on called “The Daily.”

The idea of a newspaper — or rather, a paperless news service — that is designed from the ground up for a device like the iPad is a good one. Instead of taking the existing structure of a newspaper, with its printing plants and rigid publishing schedules, and trying to adapt that to a digital, always-on medium, creating something that is designed specifically for that medium, and for a tool like the iPad, makes a lot of sense. Unfortunately, that’s not what Rupert Murdoch is creating, or at least not according to the reports we’ve heard so far.

One of the major flaws is telegraphed by the name of this new creature: “The Daily.” According to New York Times media writer David Carr, the staff that Murdoch has put together at a cost of about $30 million or so will be creating content that will mostly be published once a day, just like traditional print newspapers are. Why? Good question. One of the most obvious features of Internet-based news is that it is happening at all times, and from dozens of different sources, every minute of the day and night. Maybe stepping back from that has some value — but publishing once a day seems hopelessly antiquated, like a monthly newsmagazine.

Another major flaw, as Salon founder Scott Rosenberg and others have noted, is that because it is solely a for-pay service, The Daily’s news will not really be part of the Internet at all — there will be no links to its content from outside the News Corp. venture because it will live behind a paywall (although the new publication will apparently have a website that “mirrors” some content to give readers a peek at what is available). No sharing via Twitter, no posting links to Facebook, no blogging about the content — nothing that creates the kind of buzz and connections that a modern Internet media entity should be taking advantage of.

Contrast Rupert’s vision with the one put forward by Information Architects, the Swedish design firm that created the news iPad version of the German daily newspaper Die Zeit. It isn’t an app at all, but a brilliantly-designed iPad version of the paper’s website, which uses HTML5 to give the site an app-style look and feel, while still using the Internet as its delivery system instead of Apple’s app platform. Since it is freely available, links and sharing of content are built right in. Will some readers subscribe to Murdoch’s iPad paper anyway? Undoubtedly. But whether it will be enough to make it a viable business remains to be seen.

If all that wasn’t enough to make you pessimistic about The Daily’s chances, there’s Rupert Murdoch’s track record in digital ventures: after years of railing against Google “stealing” his news content for Google News, the media mogul spent over a year and more than $30 million trying to build a competitor before finally killing it. He is also said to be close to putting a bullet in Myspace, which has been both losing traffic and hemorrhaging money over the past year, thanks to Facebook. And a paywall attempt at News Corp. flagship The Times in London is either a gigantic failure or a small, qualified success, depending on whom you choose to believe.

The bottom line? Rupert Murdoch keeps fighting the Internet, and the Internet keeps on winning. The Daily may have some powerful friends in Steve Jobs and the iPad as a platform, but it sounds like the Internet is probably going to win this one too.

Can Hunch’s Algorithm Improve Your Gift-Giving Skills?

With the holidays approaching, we’re entering that time of year when desperate people grab things like ties, inappropriate books and goofy toys in a pathetic attempt to bring joy to their friends and loved ones. Can algorithms help? New York-based startup Hunch thinks that they can: Gifts.com, the shopping site that is part of the IAC empire (s iaci), has been using Hunch’s recommendation engine for almost two weeks now, and the company says its conversion rate (i.e., the number of people who go from being shoppers to buyers) is as much as 60 percent higher than it was before the site started using the tool to make recommendations.

When you go to the Gifts.com section that is using Hunch, you are prompted to log in with your Facebook account, since Hunch uses your Facebook “social graph” or friend connections to power the feature. When you log in, you see a list of your friends (inclduing those who have birthdays coming up) and clicking on any of them brings up a suggested list of presents, along with the question “would this person like this?” and two buttons for yes and no. You can click those buttons to refine the search, or you can answer some Hunch questions to fine-tune the profile of that person.

Just as they are on Hunch’s website, the questions that the service asks range from the prosaic (does the person tend to vote liberal or conservative, etc.) to the somewhat bizarre — including “would this person think it is wrong to train dolphins and keep them in captivity for aquatic shows?” and “Would this person believe that alien abductions are real or fake?” Hunch founder Chris Dixon says that people’s answers to those kinds of questions can indicate where they fall on other spectrums of likes and dislikes, and can be used to make guesses about what they might be interested in.

The alien abduction question, for example, “tends to correlate highly with political orientation,” Dixon says, and the answers that you provide to those kinds of questions allow Hunch to make “cross-category inferences” about whether you might like a certain sports team, or whether you like Italian food better than French cuisine. Gifts.com is one of the companies and websites that are taking part in the rollout of Hunch’s recommendation platform, along with ShopStyle, Milo and FanBridge — and Hunch has also been talking to other companies, including some of the major cellular carriers.

The most obvious comparison to Hunch’s partnership with Gifts.com is Amazon’s gift-suggestion service, which also looks at your Facebook social graph in order to make recommendations — something Amazon launched in July. I haven’t used Amazon’s feature that much, but after trying it out a few times I found that it was just barely better than a guess, or a random pick from one of the site’s top most-recommended items. In many cases, it didn’t do any personalizing at all because the friend’s profile didn’t have enough information about their likes and dislikes.

Dixon says that this is one of the things Hunch’s database of correlations between questions and likes or dislikes tries to do: namely, to fill in the gaps or make connections between the things people like on Facebook and the things they might like elsewhere. And it learns over time — Hunch’s recommendations, for example, seemed fairly wide of the mark for many of my friends, even after I did some training of the algorithm by answering questions, but Dixon said that the overlap between the kinds of products at Gifts.com and the kind in Hunch’s database is not very large, and so the system is still learning.

“I think it probably needs another two weeks or so before it becomes mature,” Dixon said. The good part of such relationships for Hunch, he says, is that the more data it pulls in about what people like or don’t like — and the average user at Gifts.com is giving feedback on 20 items, which is higher than expected — the better the system gets at making recommendations. And maybe some day it will be better than just randomly picking up a pair of cufflinks or slippers for that person on your holiday list.

Red-Hot Tumblr Raises Huge New Funding Round

We are hearing that Tumblr, the web-publishing platform that has seen spectacular growth over the past several months, has landed a huge new round of funding led by veteran Sand Hill Road VC firm Sequoia Capital. This news, which has also been reported by Fortune magazine, confirms rumors that we first reported on last month. Sources with knowledge of the deal put the total raised at $30 million, which would give the three-year-old company started by entrepreneur David Karp a market value of close to $135 million.

Why so much interest in the New York-based startup, which competes with other publishing platforms such as WordPress and Posterous? (please see the disclosure below). The obvious answer is that Tumblr has taken off like a house on fire over the past year: its monthly unique visitors have more than tripled, from about 2 million to more than 6 million, and comScore says the site had 1.2 billion pageviews in October — or more than four times what it had just six months ago. Although other platforms also allow relatively easy publishing of content, Tumblr seems to have achieved these kinds of viral-growth levels primarily because of its easy “re-blogging” feature, which lets other Tumblr users share a post with a single click, much like a Twitter re-tweet.

As Om noted in his piece on recent financings for Groupon and several other hot startups, these kinds of deals are contributing to the growing fear that Silicon Valley is in the grips of another financing bubble, with valuations as high as $3 billion for Twitter and more than ** billion for Zynga, and rumors of potential multibillion-dollar acquisitions by Google and other web players. Fred Wilson of Union Square Ventures recently talked about and has written about his concerns that the market for consumer-facing web services is getting frothy, which makes the Tumblr financing somewhat ironic, since Union Square is one of the company’s backers.

Not everyone is convinced that the rounds being raised by startups like Tumblr are evidence of a bubble, however: Chris Dixon, an angel investor and founder of Hunch, says that he isn’t concerned, and isn’t going to get worried until “Google, Apple, etc. start hurting.” Dixon also noted that there were bubble-type concerns raised after some early financing raised by Facebook and Twitter at what seemed like incredibly high valuations. Bryce Roberts, meanwhile, a partner with O’Reilly AlphaTech Ventures, says that he believes Tumblr in particular is worth the reported valuation given to it by the latest financing.

Union Square and Spark Capital put $5 million into Tumblr last April, adding to the earlier rounds of funding they participated in and bringing the amount raised by the company at that point to a little over $10 million. At the same time, Tumblr talked about adding a number of potential revenue-generating features to the site, including stickers and a marketplace where designers could sell their Tumblr themes.

Disclosure: Automattic, the maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Like Democracy, the Web Needs to be Defended, Its Creator Says

The web has worked its way into most of our lives to such an extent that it’s easy to take it for granted, and to forget what an incredible resource it is, or the powerful things that it allows us to do as a society. But Sir Tim Berners-Lee — the man who created the web 20 years ago next month, on his desktop computer in Geneva — says that there are threats to the freedom of the web all around us, and that we need to fight them in the same way we fight to protect our freedoms and rights in the so-called real world.

Where are those online threats coming from? Berners-Lee doesn’t mention anyone by name, but he does say that “large social-networking sites are walling off information posted by their users from the rest of the Web,” in what appears to be a clear reference to Facebook’s walled-garden approach to sharing things like the email addresses of its users. The other potential threats, he says, include wireless Internet providers who are “being tempted to slow traffic to sites with which they have not made deals,” and also governments — totalitarian and democratic alike — who are “monitoring people‚Äôs online habits [and] endangering important human rights.”

The father of the web even takes what appears to be a thinly-veiled shot at Apple, saying that if the trends he is describing towards more closed environments on the web are not checked, “we could lose the freedom to connect with whichever Web sites we want [and] the ill effects could extend to smartphones and pads, which are also portals to the extensive information that the Web provides.”

In some ways, Berners-Lee’s list of threats to the open web sound very much like the recent Wired magazine piece entitled “The Web is Dead,” which also looked at the rise of apps and the move towards AOL-style walled gardens. Wired’s piece got some criticism from many (including me) because it seemed to be overly negative, especially since much of what the magazine described as non-web — smartphone apps and so on — still depends on web protocols, even if they are hidden from view. But Berners-Lee echoes Wired’s concerns about large players controlling access to information in various ways.

Others have raised similar warning flags about potential threats to the open web from giant information quasi-monopolies such as Google, Facebook and Apple — including Tim Wu, the Columbia University law professor who coined the term “net neutrality,” and warns in his recent book “The Master Switch” that instead of a monument to the open market, the Internet is starting to look “like a Monopoly board,” and that the Internet may even tend to favor monopolies.

It should be noted, however, that not everyone agrees that Google or Facebook are actually monopolies in any kind of legal sense, although they are definitely dominant players. And while Google is clearly a web giant, it’s worth remembering that Yahoo and AOL were once web giants too, and they are shadows of their former selves now, displaced by completely new players. Even Facebook, which is now seen as one of the companies to be afraid of, is threatened in many ways by Twitter — a startup that barely even existed a few years ago and is now reportedly valued at close to $3 billion.

That said, it is worth being reminded that large players often see it as being in their interests to restrict the freedom of their users, and that — as Berners-Lee warns in his Scientific American piece — this can chip away at the web’s core principles, which he says revolve around “a profound concept: that any person could share information with anyone else, anywhere.” If that becomes circumscribed by the companies controlling the flow of that information, he says, “the Web could be broken into fragmented islands.” Why should we care about these potential incursions into the open web? Berners-Lee says:

Because the Web is yours. It is a public resource on which you, your business, your community and your government depend. The Web is also vital to democracy, a communications channel that makes possible a continuous worldwide conversation. The Web is now more critical to free speech than any other medium. It brings principles established in the U.S. Constitution, the British Magna Carta and other important documents into the network age: freedom from being snooped on, filtered, censored and disconnected.

More critical to free speech than any other medium? That is a strong claim — but there is certainly an argument to be made that the web fits that definition. The ability to send information to anyone, to link to content wherever it exists, and to publish almost instantly seems so commonplace now that we forget how important it is, in almost exactly the same way that democracy itself is important. It’s good to be reminded of that, and Tim Berners-Lee is certainly the one who is best equipped to do so.

Myspace Admits Defeat, Integrates With Facebook

Sometimes it just doesn’t pay to keep fighting the inevitable. In the case of Myspace, that means admitting the unpleasant — but equally undeniable — fact that it has lost the social-networking race to Facebook. The News Corp. subsidiary has been doing that gradually over the past few months, and the latest move in that direction came today, with the launch of a new feature that Myspace CEO Mike Jones called “Mashup with Facebook,” which allows users to import their Facebook profile, favorites and content into Myspace.

Jones said that the mashup feature would let Myspace members “create a personalized stream of entertainment content” based on their profile and favorites from Facebook, and that the launch was part of the network’s goal to be the web’s “leading entertainment destination.”

As a number of outlets have already reported, Facebook login integration with Myspace has been available for some time now (at least since yesterday), allowing new users to signup by using their Facebook profile in the same way many others do. Myspace also launched something called “sync with Facebook” in August, which allows users to connect their status updates and other activity with their Facebook profile or pages, and to push content from Myspace to the larger social network. Jones said Myspace was also planning to add Facebook “like” buttons to the site soon.

Dan Rose — Facebook’s VP of partnerships and platform marketing — pointed out during the news conference that thousands of other websites have already integrated with Facebook’s platform. But Myspace isn’t just any other service: it is the company that media kingpin Rupert Murdoch paid $580 million for in **, convinced that buying what was then the leading social network was the route to social-media riches for News Corp. Instead, traffic to the site has plummeted, despite refocusing on music and a recent heavily promoted redesign.

Myspace CEO Mike Jones reportedly told The Telegraph at the Monaco Media Forum last week that Myspace has effectively given up the social-networking race, and now sees itself as a “social entertainment destination” (Om wrote the social network’s obituary in February, after the departure of former CEO Owen Van Natta). Jones, meanwhile, said during the press call that he is excited about Myspace’s refocusing as an entertainment destination, and that he sees the new feature as “complementary” to Facebook.

The big question, of course, is whether this integration will matter or not. There may well be users who are devoted to Myspace who will use the connection with Facebook to pull their profile info and other content onto their Myspace page and maintain two separate social networking identities, but it seems more likely that this will accelerate Myspace’s slide. And it may be just the first step in accelerating the property’s ejection from News Corp. as well: in a recent conference call about News Corp.’s financial results, president Chase Carey said the site’s lifespan was being “measured in months, not years.”

Twitter and the Power of Giving People a Voice

It didn’t get as much attention as his comments about generating revenue and fighting with Facebook, but to me one of the most interesting things that former Twitter CEO and co-founder Evan Williams said during his interview at the Web 2.0 Summit on Wednesday was his comment about how Twitter “lowers the barriers to publishing almost as far as they can go.” Williams said that the impact of doing this is only beginning to be felt, and I think he is absolutely right.

The answer came in response to a question from the audience about how Twitter empowers people to publish and effectively act as journalists, and Williams said that lowering the barriers of entry into publishing is something he has worked on for most of his career (since he also founded one of the leading early blog-publishing platforms), and that he has done so based on his belief that “the open exchange of information has a positive effect on the world.” In a nutshell, Williams said, this is what the Internet as a whole allows us to do, and society is still trying to figure out all the repercussions that stem from “everyone having a voice.”

It’s not just Twitter that is empowering this, obviously — it’s everything from YouTube and handheld video cameras to powerful cellphone cameras, from blog platforms and Tumblr to self-publishing via the Kindle and other e-book platforms. It’s an explosion of voices, and Twitter is at the center of it only because it makes “micro-blogging” so easy and the network has grown so huge that a tweet can be passed around the world and back before newspaper reporters are even getting their shoes on.

Yes, there is a lot of noise on Twitter, as Andrew Keen seems to argue in his recent debate with David Weinberger, but the point is that Twitter provides a firehose of both meaningful and non-meaningful data, in tiny bite-size pieces, and it is up to you to figure out how to deal with it. That has led to some interesting tools aimed at “curation” — that is, pulling those fragments of information and conversation back together and making sense of them — such as Storify (built by former AP correspondent Burt Herman) and Curated.by and other services that allow you to pull together various threads from Twitter.

But on an even deeper level, there is a big opportunity to use that flood of 100 million tweets a day as the foundation for trend-filtering and other tools. Some startups have focused on how to use this to track social mentions of companies or products, such as Sysomos and Radian6, while others — such as Nick Hamstead’s DataSift and Tweetbeat, which was built by the analytical brains behind Kosmix — are trying to filter all that data and find out what the world is talking about in real-time. There is huge potential there not just for companies but for journalism.

As Ken Doctor notes in a piece at the Nieman Journalism Lab, using Facebook’s new social inbox as the metaphor, news is everywhere now — it comes to us in all kinds of different forms and different ways, and obviously Twitter is one of those. Most traditional news organizations have not figured out how to use those tools effectively yet, or how to take advantage of this transformation of the news industry, but some are trying. At its best, during events such as the subway bombing in London or the uprisings in Iran, Twitter allows for the true “crowdsourcing” of journalism, and that is a very, very powerful tool for the pursuit of truth, broadly speaking.

It’s true — as Malcolm Gladwell and others have argued — that Twitter has not saved Iran, or stopped China from cracking down on its citizens, or dozens of other things that other technologies have also not accomplished. But the fact that people in repressive countries can communicate with others relatively quickly and easily, even if those messages do get them imprisoned, is a powerful thing. It’s not clear whether she has done so yet, but Burmese freedom fighter Aung San Suu Kyi said that if and when she was released from house arrest after 20 years (which she has been), she wanted to get a Twitter account so she could communicate with her supporters.

Many people are still focused on Twitter as a tool for promoting movies or TV shows, or see it as a toy that geeks and their friends play with to amuse themselves. But the real power in what Jack Dorsey and Biz Stone created (and what Ev Williams later financed and built into a company) could well be that it is the simplest, the easiest and arguably one of the most efficient forms of mass publishing — or at least micro-publishing — ever invented. And as Williams himself suggested, we are still trying to figure out the full ramifications of that. It is a good problem to have.

Can You Crowdsource Fact-Checking? Truthsquad Says Yes

NewsTrust, a non-profit startup aimed at improving the credibility of media, spent a week earlier this year on an experiment it called Truthsquad — a project that tried to “crowdsource” fact-checking, and specifically some of the major statements made by public figures and special-interest groups about issues such as health care. NewsTrust founder Fabrice Florin has released some of the results from that experiment, saying the project was a success and that NewsTrust and its partners plan to expand the effort over the next year.

Among the things that NewsTrust learned, according to Florin:

  • Game mechanics work: NewsTrust says the Truthsquad experiment generated twice as much participation as some of its other pilots in 2010. Users gave ten times more answers per quote than reviews per story, over half the participants read linked stories, and a third answered a Truthsquad quote. Florin said the high level of engagement was partly due to the game-like quality of the user experience, which started by inviting people to guess whether a statement was true or false.
  • Pros and amateurs can work together: Truthsquad was a collaboration with advisors and journalists from the Poynter Institute and FactCheck.org, and Florin said that having experienced professionals judge results and help users with the fact-checking avoided “some of the pitfalls of pure crowdsourcing initiatives, which can turn into mob scenes — particularly around politically charged issues.” Amateurs learned valuable skills, he said, and some community members posted links that were “critical to reaching our verdicts.”
  • Crowdsourcing takes effort: Florin said that despite high levels of participation, Truthsquad “didn’t get as many useful links and reviews from our community as we had hoped,” and as a result, the startup’s editorial team had to do a lot of work researching the evidence behind the statements they were checking, making the whole effort more labor-intensive than the group expected. Florin said that in the future, NewsTrust is going to experiment with more visible rewards for input, such as badges, redeemable credits of some kind and possibly even prizes.

Truthsquad isn’t the only attempt to bring a crowdsourced element to media fact-checking: MediaBugs, founded by former Salon editor Scott Rosenberg, is another fact-checking oriented site that is funded by a Knight News Challenge grant and recently announced it has moved out of beta and is going national. The startup has a widget that allows publishers to integrate crowd or reader-driven fact-checking into their websites, and is hoping to find other ways to distribute its services, rather than making people go to the MediaBugs site.

Like most blog-focused sites, we get plenty of fact-checking from our readers, through the comments on our posts — and it is a critical part of what we do (unfortunately, we are not perfect). Many traditional publishers, however, don’t get as much as they probably need, and both MediaBugs and NewsTrust are interesting efforts in that direction.

NewsTrust, meanwhile, says it is hoping to fact-check one public statement a day for the next year using Truthsquad. Florin says he also wants to help train users and readers in how to fact-check statements by politicians and others in the media, using the skills of the startup’s advisors, including the Poynter Institute and FactCheck.org. That’s something that we could probably all benefit from. If you want to participate, you can sign-up here.

Twitter “Screwed Up” With Developers, Founder Says

Twitter co-founder and former CEO Evan Williams admits that the company “screwed up” its relationship with third-party developers in the past, and says that happened mostly because the startup didn’t originally plan to become a platform company. Now that it is actually trying to be a platform, Williams says that Twitter will continue to try and provide opportunities for developers, but isn’t ruling out moving into any Twitter-related service or feature area, with the exception of gaming.

Williams, who recently stepped down as CEO and was replaced by former chief operating officer Dick Costolo, told the crowd at the Web 2.0 Summit in ** that Twitter originally released an API — which allows developers to integrate their apps and services with the network — because “we thought it would be neat,” and lots of other web companies had them. But as the company grew, he said to interviewer John Battelle, it realized that it needed to fill some of the holes in its feature set, and that led to the purchase of Tweetie and triggered some bad feeling in the developer community.

Twitter has continued adding features, Williams said, and plans to keep on doing so regardless of whether other companies are already providing services or apps that have those features. For example, Twitter launched an analytics-focused service today, which provides data from the 100 million or so tweets that are published on the network every day to a small group of partners. But the former CEO said that the company wants to ensure that the platform it is building also has plenty of opportunities for outside companies and startups.

Williams also said that the demand for the company’s ad-related services — such as “promoted tweets” and “promoted trends” — has been far greater than the startup has been able to satisfy, and that most of the advertisers who have tried these features have come back again. These monetization efforts have been much more successful than Twitter initially expected. The company also gets revenue from deals it signed with Microsoft, Google and Yahoo to provide the full Twitter “firehose” of data for their search engines, and today announced a similar deal to provide half of the firehose to Gnip, a company that will be reselling the data to outside analytics providers.

Battelle asked the Twitter founder about rumors that Russian holding company Mail.ru might be leading a new ** financing round that would value the company at more than $3 billion, but Williams refused to comment, saying only that Twitter “has plenty of money in the bank” already.

Google’s HotPot Launches — But Will Anyone Use It?

Google has launched a local recommendations service with a rather unusual name, and a huge disadvantage: it’s called Google Hotpot — presumably a reference to the traditional Chinese “hotpot” or communal dining experience — and the disadvantage (apart from the weird name) is that it is coming late to a market that Yelp already dominates. Google’s effort is interesting in some ways, and it has some strengths that others may not have because it is part of a giant search company, but the reality is that the odds are stacked against it.

To Google’s credit, the new feature is relatively simple to get into: you log in, search for a place and theme (i.e., restaurants, nightclubs, etc.) and it presents you with a number of suggestions, which you can then rate — and you can see the ratings of others. Once you have rated 5 places, you get Google’s attempt at personalized recommendations, which based on my initial use are pretty predictable. The idea, though, is that over time it will learn from you, and also that your friends will start using it and their recommendations will influence your choices as well (Hunch is also experimenting with local recommendations).

Coincidentally, I recently looked at a very similar service — right down to the “flash-card” style interface that Google also uses — called In The Mo, which recently launched out of beta. Like HotPot, you rate a certain number of locations and then you start to get personalized recommendations (to be fair, In The Mo also features video of local attractions, which makes it a bit different). The biggest problem for both this new startup and HotPot is simple: at the moment, they are ghost-towns.

Obviously, every socially-based service is going to be like that to begin with, but how many make the leap from that status to viral success? Not many. And just because Google is a giant web company doesn’t make its odds any higher. If anything, it makes them lower.

To be blunt, Google doesn’t have a fantastic track record with this kind of social app. There’s the ill-fated Wave and its cousin Buzz, of course, but even in the geo-location and recommendation area Google hasn’t really been able to come up with something magical: Latitude, which could have been Foursquare — particularly after Google bought Foursquare founder Dennis Crowley’s previous location-based startup, Dodgeball — doesn’t seem to get used much (at least not by anyone I know) and Google’s user reviews via its Place pages don’t seem to have gotten much traction so far either (they are now incorporated into HotPot as well).

About the only thing Google has going for it is that it can pull data from your search history (if you have that turned on) as well as your Latitude history (if you use it) and potentially make suggestions that are better than the run-of-the-mill ideas you will find via Yelp or some other local recommendation app. But these still aren’t going to be recommendations from your friends, which likely have the most power — Google HotPot isn’t going to be able to do that until your friends start using it, or until it offers some kind of connection with Facebook (which seems pretty unlikely). That still gives Facebook a leg up in terms of getting traction for such a service once it rolls out recommendations via Facebook Places.

When it gets right down to it, Google doesn’t have either of the things that Yelp or Facebook have when it comes to competing in this space: Yelp has built up a substantial database of user reviews, which gives it the depth that is going to take Google a long time to reproduce, and Facebook has the social graphs of 500 million users, which means it has the network effect and the personal aspect that is also going to be difficult for Google to reproduce.

If there was a bet on whether HotPot would be more like Google Maps (i.e., a big success) or more like Buzz, I would put my money on the latter.

Newsweek and the Gray Lady: Your Future Awaits

Ever since the news hit that Newsweek’s new owner is combining the publication with Tina Brown’s web-based media outlet The Daily Beast, there has been a frenzy of criticism over the decision to kill Newsweek’s website and redirect readers to The Daily Beast site instead. Felix Salmon of Reuters, for example, called it “bizarre,” and Newsweek.com staffers quickly set up a Tumblr blog to complain about the move, which they said was a result of senior managers who “deep down, don’t understand the web.” But is killing Newsweek.com such a bad idea? Not necessarily.

The main reason that most critics have given for keeping Newsweek.com — apart from the fact that lots of talented people have worked hard to build it, as the Tumblr blog argues — is that it gets a lot more visitors than The Daily Beast does. According to Quantcast, Newsweek’s site gets about 7 million unique visitors a month compared with about 4 million for The Daily Beast. However, as noted in a piece at Ad Age, according to the same survey the visitors to Tina Brown’s site return more frequently and stay longer when they are there. Those are important metrics when it comes to reaching (and keeping) advertisers.

This is not scientific by any means, but while I have only visited The Daily Beast a couple of dozen times since it launched, that is still about 25 more visits than I have ever made to Newsweek.com — nor am I ever likely to go there. I realize that I am not the typical online media consumer, but there is an argument to be made that when it comes to an online audience, the Newsweek brand name may actually have a negative connotation rather than a positive one. And the site won’t be disappearing entirely: Tina Brown says it will live on under its own banner, and links will obviously be redirected so that past content doesn’t disappear.

In many ways, Newsweek is facing the same kinds of wrenching decisions that other traditional media entities are — such as the New York Times, which is reorganizing its newsroom even as it prepares to launch a paywall in an attempt to produce digital revenues and/or shore up its print circulation (lacklustre numbers from News Corp.’s recently launched paywall notwithstanding). How much emphasis will be placed on the web as opposed to print? The Washington Post, which also recently merged its newsrooms, has been criticized by many because the “printies have won.” Will the print side dominate at the NYT as well?

The reality is that Newsweek is a failing brand, with a failing business model — otherwise it would not have had to put itself on the block and be sold for the equivalent of $1 U.S (plus the assumption of $40-million in debt). So why keep a website that is shackled to that fading name? Nostalgia? It’s true that the Daily Beast website is smaller, and that the startup is also rumored to be losing money. But at least it has been growing rather than shrinking, and regardless of Tina Brown’s print-based past, the Beast has a reputation as a smart web operator, not unlike the Huffington Post. Better to ride that pony than try to breathe life into another faded old-media brand.

The New York Times is a lot better off than Newsweek, obviously, but it has to make a similar choice: embrace the web, and all that entails, or allow the declining print side of the business to remain at the forefront and control the decision-making process? The fact that the newspaper is still considering a paywall (albeit one with openings to allow for social media, apparently) seems more like a defensive move than anything else. At least Newsweek’s new owner is thinking differently.