Month: November 2010

After months of speculation about the impact of reader paywalls at two News Corp. newspapers in Britain — the Times and the Sunday Times — the media giant finally released some official numbers today, and it’s not a pretty picture. While the Murdoch-owned publisher claims to be “very pleased” with the results, the figures show that the two newspapers have lost a huge proportion of their previous readership, and only a tiny fraction of those readers have chosen to pay for the company’s product. If News Corp.’s intent was to wall itself off from the Internet, however, it seems to have succeeded.

According to the company’s release, the two newspapers “have achieved more than 105,000 paid-for customer sales to date.” About half of that number are monthly subscribers, News Corp. said, while the rest were single-copy or pay-as-you-go customers — and the figure also includes people who have paid for the papers’ iPad apps and Kindle editions. On top of that number, the company said that 100,000 subscribers to the print versions of the Times and Sunday Times had activated their accounts and gotten access to the web version or the iPad app (which subscribers get for free).

The bottom line is that News Corp. has managed to attract just over 50,000 new monthly subscribers in the four months since it has been running its paywalls at its two British papers — which charge $1.60 for a day’s access to the site or $6.40 for the week — and along the way has managed to sign up 100,000 or so who were already subscribing to the print edition, who are paying nothing (although holding on to those subscribers is likely a key part of Murdoch’s strategy).

This looks even worse when you compare it to the total readership the Times and Sunday Times had before the paywalls went up, which according to Nielsen was about 3 million unique visitors a month. In other words, News Corp. has managed to convince just a little over one-and-a-half percent of its readers to pay something for the newspapers’ content — and has only been able to convert half of that already tiny figure into monthly subscribers. Meanwhile, the site’s overall traffic has collapsed by almost 90 percent.

Times editor Jeremy Harding told the BBC that the paper is okay with the loss of readership because “we were engaged in a quite suicidal form of economics, which was giving our news away for free,” while adding that online media was mostly a “huge echo chamber” anyway. News Corp. executive Rebekah Brooks, meanwhile, said that the company was pleased with the results, and that “each of our digital subscribers is more engaged and more valuable to us than very many unique users of the previous model.”

It’s hard to see how much more valuable they could possibly be, however: a number of major advertising players have said they are less interested in working with the Times and Sunday Times now as a result of the paywalls, and even an optimistic estimate of the amount of revenue the company is bringing in from its paywalls and iPad app only comes to about $8 million (and that’s before Apple’s cut for the iPad app) which for News Corp. is almost a rounding error. Meanwhile, the newspapers have been cut off from the news flow on the broader Internet, and the potential benefits of attracting links and commentary from other sites that could help to promote its content.

If you spend a lot of time on Twitter, you’ve probably already seen Twitter spam — messages from normal-sounding accounts that pop up with links they would like you to click on, or marketing messages. If you check their profiles, they are usually being followed by no one, and in many cases have sent out thousands of tweets despite only having been on Twitter for a matter of months. More recently, Twitter has been hit by the political version of this phenomenon — also known as “astroturfing” — in which dummy accounts either re-tweet links to attack ads and articles, or post other comments designed to get a specific hashtag or link to trend or show up in search.

Researchers at the University of Indiana have set up a project to try and detect and analyze these kinds of tweets — and they clearly have a sense of humor, since they named the project Truthy, after the satirical idea of “truthiness” popularized by comedian Stephen Colbert on his faux news show The Colbert Report. As MIT’s Technology Review describes, the project was inspired by a research paper that earlier this year that looked at a 2008 special Senate election, and found almost a dozen Twitter accounts were repeating the same negative tweets about the candidates. Truthy’s algorithms come up with “diffusion networks” for individual memes, which can sense when they are likely to be real and when they could be manufactured.

The point of astroturfing, of course, is to create the illusion of grassroots support for something (hence the name), by generating what appear to be genuine messages about a candidate or an issue. So, for example, Truthy noticed during the runup to today’s mid-term elections that several Twitter accounts — including ones named @PeaceKaren_25 and @HopeMarie_25, both of which Twitter has since shut down — were tweeting and re-tweeting tens of thousands of identical messages aimed at linking to and/or promoting House minority leader John Boehner’s website.

In another case, a 10-user group was using the hashtag #ampat to promote the website Freedomist.com and to distribute negative attacks on Democrat Chris Coons, and an account called @GoRogueRunSarah promoted links to a website displaying pro-Palin and anti-Muslim propaganda. According to researcher Filippo Menczer, the Truthy team noticed that certain terms were tweeted so much they actually showed up in Google trend searches. Twitter, of course, would much rather have companies and political parties buy one of the company’s “Promoted Trends,” as the Washington Post did by paying for the hashtag #election during today’s elections.

That astroturf is occurring on Twitter shouldn’t really come as any surprise. Just as the rise of email gave birth to spam, and the rise of Google and other search engines produced an entire industry devoted to SEO rigging of search results, so Twitter’s rise as a real-time communications medium has made it a convenient platform for the same techniques — used in ways that take advantage of the social nature of the network. As Twitter continues to grow, it’s likely that we will see more of this kind of thing rather than less. Hopefully tools like the Truthy project will make it easier in the future to detect whether PeaceKaren_25 is a real person or a bot.

I asked Twitter for a comment on what Truthy has been discovering in terms of astroturf attempts, and Del Harvey — the service’s head of Trust & Safety — said the company routinely flags accounts that are either highlighted by its back-end spam detection systems or reported by users. Twitter evaluates these reports “independently of subject matter [as] part of our context-free policy,” she said, presumably so that there are no suspicions about the service playing favorites. Harvey also added that “we’ve been aware of Truthy’s work and have suspended some incriminated accounts [and] the investigation is ongoing.”

Being a kid can be a lot of fun, but eventually you have to grow up. It happens to all of us, and technology startups are no exception. Until recently, Twitter seemed more like a cool experiment thrown together by a few guys as a side project than an actual company — probably because that’s exactly what it was. But when you have 175 million users and over $150 million in venture financing, you have to start getting serious, and for better or worse that’s exactly what Twitter has been doing. The latest signs of that maturation are the departure of Evan Williams as CEO and the company’s renewed interest in cracking down on things like who can use the word “tweet” and when.

The first of these steps is explored in detail in a New York Times piece published this past weekend, in which Williams is described as a visionary when it comes to product design, but more or less an abject failure when it comes to managing people, and the kinds of difficult financial and structural decisions required of a CEO. Williams himself admits this, saying: “I’ve screwed up in many, many, many ways in terms of managing people and product decisions and business.”

It’s a tribute to the Twitter co-founder’s own maturity level that he came to realize this and stepped aside in favor of former chief operating officer Dick Costolo, an experienced startup executive with what most people seem to agree are the necessary chops for such a task. Some of the Williams’ maturity may have come as a result of some painful experiences along the way — including some bad blood related to his previous startup, Blogger (which was bought by Google), and the forcing out of Jack Dorsey, one of Twitter’s co-founders and the original CEO of the company.

Some of what Twitter has been doing as it matures is structural: expanding its headcount dramatically, fixing its stability issues, redesigning the website, launching of official apps for the iPhone and Android, etc. But much of what Costolo has done is also aimed at making Twitter a “real” business — not just a cool service that doesn’t know what it wants to be when it grows up, but a business with revenue (via things like Promoted Tweets) and rules. And flexing its muscles as a business and enforcing those rules has caused some tension with what developers call the Twitter “ecosystem.”

The first eruption of this came earlier this year, after Twitter acquired the Tweetie app for the iPhone and investor Fred Wilson talked about the need to “fill the holes” in the company’s feature set. Many developers took that as an attack on them, and some clearly felt betrayed, since many of these third-party apps had helped promote and build Twitter into what it was. This weekend saw a small flashback to that tension, when Twitter’s rules around the use of the word “tweet” and other trademarks got some attention in the blogosphere.

In a nutshell, the company says it wants companies to avoid the use of the word “tweet” in their name if their app or service does things other than access Twitter — a clear shot across the bow of services like Tweetdeck. Although there was a lot of grumbling about these directives, it seems like a natural move for Twitter to make. Investor Chris Sacca noted in a Twitter exchange with Hunch co-founder and angel investor Chris Dixon that Facebook has done the same thing with respect to apps and services that use terms like “face” and “book” and “wall.”

More than anything else, the response from the blogosphere and from Twitter developers sounds a little like friends criticizing their former childhood pal because he has started wearing a suit and has gone “all corporate,” and is therefore no fun any more. Twitter isn’t out of adolescence just yet: even Williams describes the company as “a 6-foot-tall sixth grader” with a “lack of maturity, despite size and the perception of outsiders.” But there is no question it is becoming more of a business, as it should. Twitter’s challenge now is to maintain some of that spirit of fun — and the support of its ecosystem — as it grows into adulthood.

When it comes to the group-buying market, Groupon is clearly the 800-pound gorilla, with 20 million subscribers, over $160-million in venture financing and a market value of more than $1 billion. So how do you compete with that kind of presence? If you’re Tippr, you don’t — you arm websites and publishers with the weapons to do that themselves. The Seattle-based startup today launched a white-label group-buying platform that does exactly that: gives companies an alternative to signing up with Groupon, by providing them with both the software and support to run their own group-buying campaigns.

Tippr founder Martin Tobias — who is also a venture partner at Ignition Partners in Seattle, and founded a streaming-media company called Loudeye in 1999 — says the company began as a spinoff from another company he started called Kashless.com, which offered local businesses a local classified-advertising solution (that business is in 130 cities and has 700,000 users, he says). When Tobias talked to his clients about an advertising offering, some mentioned that they were looking at offering deals through Groupon and LivingSocial. “They said it was just like advertising, except they didn’t have to put any money up front and it got people to walk in the door,” Tobias recalls.

So Tobias set up Tippr.com, but says the idea behind the site was always to use it as a proof-of-concept for the company’s eventual white-label offering, which has been in beta testing with several large publishers for the past few months. “We thought of Tippr as a kind of owned-and-operated version of our service, as a way to show clients our ability to provide a white-label group offering,” he says. Despite the fact that the company wasn’t really focusing on the site itself, Tobias says that Tippr.com is the number three group-buying service in many major markets, behind Groupon and LivingSocial (it is in 13 markets in total, and the site gets about 700,000 unique visitors a month).

Tippr’s pitch to publishers is that deals with Groupon and its traditional competitors, which a number of newspapers have signed recently — including a deal with McClatchy, publisher of the Miami Herald and other papers — effectively sign over control of the relationship between a reader and an advertiser to Groupon, and cut the publisher out (although they get a share of the revenue). Tobias says that in talking with potential clients for the white-label version of Tippr, many companies said they didn’t want to do this. “When that McClatchy deal was announced, my phones started ringing off the hook,” he says. “I’ve talked to a number of publishers who see Groupon and LivingSocial as fundamentally being in competition for marketing dollars that they feel they should be getting.”

The white-label solution, the Tippr founder says, gives publishers and other sites full control over the relationship with both advertisers and customers, and anything that happens remains within their brand. “We even do customer service as well,” says Tobias, “so that when a user calls they think they are dealing with the publisher, but it’s our people helping them print a coupon or whatever.” One media company in Baton Rouge, he says, heard that LivingSocial was coming to town and decided to do its own promotion using Tippr, “and their weekly deals outsell LivingSocial’s by a factor of 10 to 15 times, every time,” according to Tobias.

While some publishers like McClatchy might see partnering with Groupon or LivingSocial as a shortcut to riches in the group-buying game, others may see things differently, and resent giving someone else control over the advertising relationship. Tippr’s white-label offering seems like a reasonable compromise — and as big as Groupon gets, there are likely to always be companies that prefer the other option.

It may not be quite as big a deal as the presidential elections in 2008, when Barack Obama’s campaign team used social media and social networks to mobilize supporters and win the White House, but the mid-term state elections happening tomorrow have some of their own social tools — including a special Foursquare badge, a Facebook “get out the vote” pitch from the President, and a geo-location app for tracking polls. There’s also a cool Twitter visualization from the brainy nerds at the New York Times and an analysis of whether the number of Twitter followers can predict who wins the election.

Foursquare Maps: As we’ve noted before, the location-based service has been gradually extending its virtual game-world of badges and achievemenets into the real world, and the special election badge it has created is another example. But it’s not just a badge — Foursquare is planning to track activity and display it in real time on a map, and says it sees the mid-term elections as a kind of training ground for the national elections in 2012.

Vote with a check-in: GeoPollster is another election visualization app based on Foursquare: you select which political party you currently support, and then each time you “check in” at a Foursquare venue, GeoPollster counts your check-in as a vote for that party. The site then tracks votes across the various states based on activity. Obviously this isn’t likely to correlate with actual voting patterns, but it does produce funny headlines like “Democrats seize control of LL Bean outlet in Pittsburgh.”

Challenge your friends! Organizing for America has a Facebook app called The Commit to Vote Challenge that is aimed at getting people to publicly display their intention to vote, and to challenge their friends and acquaintances to vote as well. According to the site, the average use who commits via the app has passed along the message to 10 friends, and nearly a third of those who have committed to vote and provided a reason are first-time voters.

Twitter bubble view: The programmers at the New York Times have done some fascinating things with data visualization and elections in the past, and this time around they have come up with a real-time view of Twitter activity that looks at tweets that come from, are directed to and are about each of the candidates. Bubbles grow and shrink depending on the volume of activity. What does it mean? We’re not sure, but it’s fun to watch.

Do followers = voters? Dan Zarrella, a social-marketing researcher, looked at the official Twitter accounts for 30 senate, governor and house of representatives candidates, and then correlated the number of followers with the performance of those specific candidates in early polls. In more than 70 percent of cases, the candidate with the most followers was also ahead in the polls. Of course, this suffers from the “correlation vs. causation” problem — did the leaders get more followers because they were leading, or were they leading because they had more followers? Klout has a similar ranking of candidates based on their Twitter influence score.

Not to be left out of the action, Google has a mobile app/website that will show you where your polling station is and keep you up to date on any news related to your area. And we wrote recently about a candidate for the Senate whose programmer son came up with an election game that uses Facebook Places check-ins as way of encouraging people to get out and vote. Fred Trotter said that he hoped using social networks would help the U.S. move away from a brand of politics based on heavily financed interest groups and polarized viewpoints on the major issues.

We’re not sure whether that will actually happen or not, but it looks as though the “gamification” of elections is increasing, for better or worse — so go out and get your badge.Rob Boudon