Great conversation at Third Tuesday

Just a quick note to say thanks to Ed Lee and David Jones of Fleishman-Hillard, and Joe Thornley of Thornley Fallis, for inviting me to speak at Third Tuesday — the PR/blogger meetup thing in Toronto that is loosely based on the Third Thursday get-togethers in San Francisco (more info here).

We had a great crowd out at the Spoke Club, and lots of interesting questions about bloggers vs. journalists and how to deal with them, how to convince companies that they should have (or at least pay attention to) blogs, and how Edelman dropped the ball with its recent abortive Wal-Mart blogging campaign.

third tuesday

It was a great example of the real-world version of the thing we all keep talking about online: that is, a conversation. I could have stuck around talking for even longer with some of the people who dropped by, but my knees were giving out. Oh, and I hope someone eventually settled the bill 🙂


Ed has some thoughts on the evening here, and is glad I didn’t single him out as giving a bad pitch when that question came up (now you owe me, Ed). Joe has a nice summary here and the inimitable Michael O’Connor Clarke has also written about some of his impressions of the evening.

Speaking of cash machines…

I guess I have money on the brain (see my previous post about Craigslist as a cash machine). Courtesy of I Want Media, I came across a story from Marketwatch about how Google could wind up with more than one-quarter of all the online ad spending in the United States this year.

google profits

According to the story, eMarketer estimates Google will wind up with revenue of $4-billion this year, which would be 25 per cent of the estimated $16-billion online ad market. That would also represent a revenue jump of about 65 per cent. Not bad. Another interesting point in the report is how Google continues to pull away from Yahoo in the online ad race:

In 2005, Yahoo and Google had virtually the same amount of U.S. ad revenues. Yet by the end of 2006, Google is expected to pocket almost twice the amount of U.S. ad revenues as Yahoo, according to the new eMarketer report.

Yahoo will see revenue growth of just 17.5 per cent, according to the eMarketer analysis, which is here. Of course, Google already has about 50 per cent of the paid search advertising market, while Yahoo’s share has been slipping.

Craigslist — a giant cash machine

Thinking about how much money Craigslist could potentially make — if it wanted to — still boggles the mind. I came across a little item from Bloomberg about Craigslist adding fees in four more major cities: $25 for professional job listings in Boston, San Diego, Seattle and Washington. And what is that expected to do to revenues at the company? Um, let’s see… would you believe it could boost them to $50-million next year, or double what they were last year?

Consider this: Adding those four cities makes for just eight cities out of the 57 or so that Craigslist currently operates in (although some of those are relatively small). And those fees are only for professional job and (in New York) real estate listings. In fact, Craig has said his major impetus in adding fees is simply to cut down on the amount of listing spam. Adding fees for jobs in a few more cities, or for real estate in a few more cities, could theoretically boost Craigslist’s revenue by another $50-million or so.


And those are fees that are $10 or $25, which is drastically cheaper than existing outlets. Bump up a fee here or there, add one here or there — just for professionals of course — and it doesn’t take long before it’s pulling in revenue of $200-million or so, without even trying. Some think it could get significantly larger than that. Oh yes, and one more thing: This company has a staff of just 14 22 people, and costs that are probably in the $5-million range at the outside.

Is it any wonder Craig’s main job right now is fighting off venture capitalists? Too bad he isn’t interested in money. And as Haydn points out in a comment here, pushing the money thing too far would no doubt wreck much of what makes Craigslist unique. PaidContent has some more on Craigslist revenues here.

Edelman takes ownership of Wal-Mart blunder

At last, a response has come from both Steve Rubel of Micropersuasion and Richard Edelman, head of the firm Steve works for, on the Wal-Mart blogger dustup (for some background, see my previous posts here and here).

On his blog, Steve says that he couldn’t blog about it because he wasn’t involved in the file, and “there is a process in place that I had to let proceed through its course.” Knowing how large PR firms work, I have no doubt that that is the case, and knowing Steve a little bit I have no doubt that he was dying to respond to the calls for comment.

Meanwhile, to his credit, Richard Edelman doesn’t try to weasel out of the controversy, or provide any kind of lame, tangled rationale for what happened. He says simply that:

I want to acknowledge our error in failing to be transparent about the identity of the two bloggers from the outset. This is 100% our responsibility and our error; not the client’s.

Richard also says that he reiterates Edelman’s support for the WOMMA guidelines on transparency “which we helped to write. Our commitment is to openness and engagement because trust is not negotiable and we are working to be sure that commitment is delivered in all our programs.”

A little later than some might have liked — and perhaps a little falling-on-sword is being engaged in, to prevent further damage to Wal-Mart’s reputation — but a straightforward and forthright apology. Very classy, I think.


There is still quite a bit of disagreement over whether Edelman’s apology is honest and/or valid, as you can see from Dominic’s points in the comments here, and on other blogs such as Dave Taylor’s and at PR-Squared. Scott Karp says that Edelman is still trying to control the conversation too much, and that’s why they waited so long. I’ll give Scott one thing for sure: This stuff is hard. Anyone who says differently is full of it.

Did Edelman drop the ball on Wal-Mart?

I wonder if Richard Edelman — or someone at the PR firm — is regretting that they ever decided to take Wal-Mart on as a client. It wasn’t that long ago that the company started a blogosphere flame war because it provided PR material to bloggers as part of a campaign to win the hearts and minds of America, material that some bloggers used without saying where it came from. Should they have disclosed that? Yes. Was it Edelman’s fault they didn’t? That’s a tougher one to answer. I would argue that it isn’t, but others disagree.

Now, the firm is under fire again for a “fake” blog about how great it is to drive your RV around and park overnight in Wal-Mart parking lots, something I wrote about here and many others have covered as well, including Shel Holtz, Scott Karp and Tony Hung at Deep Jive Interests. So far, no response from either Edelman or its most famous blogger, Steve Rubel. Is the war room on full alert? I would expect so. But one wishes someone would come out and say something — anything.


There’s been a lot written about this, but it’s worth focusing on what exactly the point is. It’s not to beat up on Edelman, which I think is a fine company that does a lot of good work, and seems to want to do the right thing as far as the “conversation” is concerned. And I would argue that it’s not obvious the blog was a “fake” blog — from what I can tell, the people who wrote it really wanted to do such a trip, thought it was genuinely great, and simply got paid by Wal-Mart to do it.

But the disclosure was almost completely lacking — lacking to such an extent that one of the bloggers’ employers wasn’t even clear that there was sponsorship involved. Did Wal-Mart dictate what could be said about the blog? In all likelihood they did. And Edelman probably acquiesced at some point, when they shouldn’t have. If you’re going to try and have a genuine conversation — something Jeremy Wagstaff isn’t even sure is really possible when a PR company is involved — you’re going to have to try a lot harder than that.


Richard Edelman and Steve Rubel have both responded. See my updated post here.

News flash: Andrew Keen still a moron

I know it hasn’t been that long since I took a few roundhouse swings at Andrew Keen, the sometime entrepreneur and “social critic,” who wrote about the Google-YouTube deal and how it was like two thieves uniting. But I just came across a post promoting his new book, entitled “The Cult of the Amateur: How Blogs, Wikis, Social Networking, and the Digital World are Assaulting our Economy, Culture and Values,” and it just sounds so mind-bogglingly stupid I couldn’t help myself. This makes Nicholas Carr sound sane.

The cover of the book has an hourglass (the kind that you see when your computer is busy) because, Andrew explains:

There’s not much time left, that symbolic hourglass suggests, until our whole culture is swept away by the dire consequences of Web 2.0 egalitarianism.

and then he adds:

We are teering on the edge of catastrophe. Blogs, wikis and social networking are, indeed, assaulting our economy, our culture and our values. Web 2.0 is pushing us back into the Dark Ages.

In other places, Andrew has held forth this apocalyptic view as well, saying:

Web 2.0 undermines conventional expertise and moral authority in favor of the authenticity of the ordinary blogger, digital photographer or musician. But the truth of this “authenticity” is the cacophonous din of ephemera: The self-authored content on the contemporary Internet is either irreverent, narcissistic or pornographic.

Boy. Thank God there’s someone like Andrew standing up for the movie studios and record companies and society in general. We wouldn’t want to encourage people to express themselves, or (God forbid) be irreverent. For more samples of what I would loosely refer to as Andrew’s “thinking” on this subject, check out an interview/debate he took part in with Chris “Long Tail” Anderson, organized by the SF Gate.


My M-list pal Kent Newsome calls Andrew a classic example of what basketball players call a “self-check.”

Click here so I can get paid

I’m a little late to this particular party, but I wanted to wade into the debate over whether compensating journalists based on how many hits they get is a good thing to do or not, which Business 2.0 editor Josh Quittner started. Being a journalist and a blogger, this is something I’ve thought a little bit about — in fact, I remember when we first got a really good page-view tracking tool at, and I was joking with my editor about getting paid on a pay-per-click model.

He seemed taken with the idea (in part, I suspect, because he knew how few clicks I was getting :-)). And I also remember a couple of years ago how a newspaper in Chile called Las Ultimas Noticias decided to shake things up by putting the Web stories that got the most clicks on its front page — and also paying its reporters based on who got the most clicks. In one of the first reports I read about what happened next, many of the front-page stories seemed to involve explosions or swimsuit models.

Is that surprising? Not really. Tabloids already do pretty much the same thing, because they know what will draw readers. Even regular newspapers choose pictures and headlines based on what will get people to buy a paper, or (hopefully) read it. Tracking the actual clicks a story or blog gets just gives you an even more granular view of how many people read — or don’t read — what you’ve written.

That can be a very humbling thing for a journalist, I assure you. We all want to believe that every single reader our paper has is poring over our every word, when in fact they flip past us to get to the crossword. Dan Shanoff at Huffington’s Eat The Press is concerned that paying people based on traffic will corrupt them, but as Jeff Jarvis points out — and James Robertson notes as well — newspapers already hire, fire and otherwise reward writers based on how well they are read.

Should writers and reporters be motivated solely by a desire for filthy lucre? Obviously not. But it is already part of the equation. Josh is just proposing that we make it a little more obvious.

Shopping moves into virtual worlds

Paul Hemp emailed me recently to let me know about a piece he wrote for the Harvard Business Review, entitled “Are You Ready for E-tailing 2.0?” In it, he talks about the moves by retailers such as American Apparel to set up virtual storefronts in the game Second Life, and how this could lead to an increasing amount of shopping taking place online, with friends meeting virtually to window-shop in virtual stores.

second life

According to the piece, Raz Schionning, who oversees Web marketing for American Apparel, says that

Visitors to the Second Life store often arrive in groups and seem to know one another. They typically talk about the clothes on display. They might buy something or watch the in-store videos. But they often end up chatting about unrelated topics, even as they continue to linger in the store—mirroring the activity at popular virtual clothing stores in Second Life, such as Preen and Dazzle Haute Couture.

I’ve written before — both on this blog and in a recent Globe and Mail column — about this idea, and how smart retailers and marketers like American Apparel and Adidas (and even Telus, one of Canada’s telecom companies) are making inroads into Second Life and using these virtual worlds for word-of-mouth marketing.

One of the things that got me to write about this phenomenon, in fact, was an earlier piece that Paul did for HBR, which was accompanied by a virtual conference in Second Life about marketing to avatars. I think Paul is definitely on to something.


In other Second Life news, Reuters is opening a virtual news bureau in the game, staffed by reporter Adam Pasick — who will appear as avatar Adam Reuters. His first piece was an interview with the head of in-world bank Ginko, and he said he plans to cover it just like any other developing economy or society. The bureau is here.

Who screwed the pooch on Friendster?

If I were an advisor to a startup, or a venture capitalist like Paul Kedrosky or Rick Segal or Fred Wilson, I would clip and laminate the story from today’s New York Times about the decline and fall of Friendster, or blow it up and make a wall-hanging for the boardroom, or force every employee to memorize it, or something equally dramatic. As a VC in the story says, Friendster is an “iconic case of failure,” an epic tale of missed opportunity and failed potential, like a Greek tragedy with Silicon Valley engineers and VCs instead of Oediupus and his mom.

In 2003, Friendster was a social-networking star, and growing quickly. Kleiner Perkins and a host of other top VCs were all over it like white on rice. The company turned down a $30-million buyout offer from Google. Why not? It was going to be huge. Then came the stability and performance issues as it grew — ignored, of course. Then the “help” from miscellaneous CEOs, board members and others, most of which focused on competing with Google, Microsoft and Yahoo. And a long, spiralling trip from superstardom to the bottom of the barrel, as MySpace became everything Friendster could have been.


So who’s to blame? The founder suggests (through a friend) that the VCs screwed everything up. Some of the VCs even appear to agree. The legendary John Doerr of Kleiner Perkins says “We completely failed to execute… everything boiled down to our inability to improve performance.” While the executive team was planning to expand and offer all kinds of new features, the site was so slow as to be almost unuseable, and it continued to pursue a kind of gated-community approach even as MySpace opened itself up to anyone.

This story should be required reading in the Valley, especially now during what may or may not be Bubble 2.0.

Why isn’t this on Techmeme?

Tony Hung, who blogs at Deep Jive Interests, pointed something out to me via email — and if he hadn’t, I probably never would have heard about it. There has been plenty of news and discussion about it, but none of it has shown up on or any of the other feed aggregators and meme-trackers I follow. Why? Because no “A-listers” have written about it (as Gabe Rivera of Techmeme points out in my comments, it’s there now).

It’s an issue that strikes right at the heart of the debate the blogosphere has been having lately about PayPerPost and blog “payola,” and whether bloggers should disclose their conflicts of interest.

The issue has to do with Edelman, the PR firm that Steve Rubel works for, and Wal-Mart. Tony’s post lays out it pretty well, as far as I can tell — as well as a story in Business Week, and posts from Shel Holtz and Biz Hack. In a nutshell it has to do with Wal-Mart paying for a couple of bloggers to drive their RV across America and write about how great Wal-Mart is.

Nothing wrong with that, of course. More power to them. Except that the connection to Wal-Mart, and the extensive financial backing the company has provided, is never mentioned anywhere on the blog. In light of comments made by Richard Edelman the last time the whole Wal-Mart/blogger thing blew up, where he said bloggers should “disclose receipt of product samples, membership on advisory boards or any other financial consideration that might affect their impartiality,” you would think Edelman would have made sure to do so in this case.

This doesn’t just cause confusion by blurring the lines between blogging and payola, or blog-vertising, but it arguably does Edelman harm too — and that would be a shame, since they are the PR firm that probably walks the walk the most when it comes to blogging and the conversation (the Wal-Marting Across America blog has a post that puts all the blame on Wal-Mart haters). I’m hoping Richard Edelman responds to this one in some way soon. As Tony points out in an update, the PR blogosphere is unanimously critical of Edelman on this one.


Scoble has weighed in, as have several others, including John Dowdell, who says that he isn’t sure the story is as cut and dried as it has been described. He argues that the relationship with Wal-Mart was disclosed (although I think Tony and I would argue not well enough) and that it’s not clear Edelman orchestrated the whole thing. All fair points, which it would help to hear from someone at Edelma. If I have rushed to judgment, I will be happy to apologize.