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Plenty of people have had a kick at the recent Business Week article on Kevin Rose and Digg — in some cases a Chuck Norris-style roundhouse kick, such as the one delivered by Jason at 37signals — and it seems to me that (as with so many articles in the media) one of the big problems is the headline, and it boils down to the use of the word “made.” As in Kevin Rose, the guy who “made” $60-million in 18 months.

In reality, of course, Kevin hasn’t really “made” anything, regardless of how Chris Pirillo wants to define the word. Or rather, he has made something — a tremendously useful and popular social-networking tool — but he certainly hasn’t made $60-million. It’s possible that the “people in the know” quoted in the article are right about the value of Digg, but that still doesn’t mean Kevin Rose has “made” $60-million. Even if you assume that venture capitalists put enough money into the company to give it a value of $200-million, he still wouldn’t come close to having actually “made” $60-million.

No offence meant to the authors, but articles like the one in Business Week are not difficult to write — just find someone who has valued MySpace at $3-billion or Facebook.com at $1-billion or whatever, and then divide that number by the percentage held by the subject of your piece. Or find someone who has valued users of (enter social-networking service here) at x dollars each, and then multiply by the number of users at MySpace or Facebook or Digg or whatever you want to write about.

Awhile back, everyone was having a pile of fun taking what Jason Calacanis sold Weblogs Inc. for and dividing by the number of readers, and then multiplying by the number of readers on their own blogs (I’ve got a couple of valuation widgets on the left-hand side of my blog, but I wouldn’t believe either one of them). The Business Week article on Digg is no different. It makes for a great cover line, and it probably gets people to read, but it should be taken with a giant block of salt.

Rafat is right — better not to have done it at all. And my friend Rob Hyndman is right too — the lines between journalists and bloggers are blurring, and not necessarily in a good way.

Update:

As I suspected, editing changes and a desire for a snappy cover line seem to be the cause of much of the hoopla. And Stephen Baker of Business Week tries his best to argue that “value” is a nebulous concept, and therefore the story and the number were justified. That’s a nice try, Steve — but all it really means is that the rankings of rich people done by business magazines are also highly suspect. And regardless of valuation, it still doesn’t mean Kevin Rose has “made” $60-million. Period. Which Kevin himself freely admits.

The Netscape-Digg story is the gift that just keeps on giving. First there was the offer from Jason Calacanis, formerly of Weblogs Inc., to pay the top submitters on Digg, Newsvine and Reddit if they started submitting stories to the new Digg-style Netscape site. That led to a mild flame-war between Jason and Digg founder Kevin Rose. And now Jason has updated everyone on the results of his little strategy (which some applauded and some — okay it was Mike Arrington at TechCrunch — criticized as an act of desperation) in a recent post.

According to Jason, Netscape has hired three of the top 12 Digg submitters and the top submitter from both Newsvine and Reddit. He also has some stats on how active the top Diggers are (I’d be interested in hearing Kevin’s take on those stats at some point), and expresses them in his typically restrained fashion:

“The top 10 users on DIGG are responsible for 30% of the front page stories on DIGG. That’s 3% of total front page stories each!!! Think about that for a second… the top 10 users of DIGG do 3% of the work each–that is stunning. They get paid nothing but they are responsible for 3% of the total content on the home page. Wow. Like WOW, WOW, WOW!”

Despite all the sturm und drang about the payment offer from Netscape, it’s possible that this deal could turn out to be good for everyone: Netscape has gotten lots of publicity and will get some motivated submitters, and the loss of a few people from Digg and one each from Newsvine and Reddit isn’t likely to hurt them. In fact, the Newsvine member who accepted the deal has a post up about his decision, which is well worth reading. He remains committed to Newsvine as a community, even though he will be paid to submit to Netscape.

Erick Schonfeld of Business 2.0’s blog also has an interesting post that jumps off from the Netscape issue. He says Derek Powazek — whose wife writes the Flickr blog — is publishing a print magazine that contains user-submitted photos, and plans to launch a series of magazines that contain user-submitted content and photos. He said he plans to pay contributors if the magazines start to actually make money.

If nothing else, the much-discussed decision to make America Online’s software and services completely free will result in a great laboratory experiment on a truly grand scale, an experiment that will hopefully answer this compelling question: Can a moribund online service — one whose very name has become synonymous with the word “lame,” one whose services are notoriously difficult to cancel, and one which has remained steadfastly a “walled garden” while all around it the benefits of advertising have become abundantly obvious — suddenly undergo a deathbed conversion and become an ad-driven online colossus after years of appearing to not really give a crap?

Time Warner is obviously hoping the answer is yes. The business case is somewhat easier to make than it appeared at first, since the media and entertainment conglomerate will be giving up a billion dollars or so in revenue from customers who currently pay for the luxury of having an aol.com email , but will also save the truckloads of dough it spends on marketing costs, including those billions of sign-up CDs that litter the planet (hint: they make a nice wind-chime style mobile for over the baby’s crib). And online ad revenues are growing strongly at AOL, which no doubt gives TW hope. Staci has a great breakdown of the conference call at PaidContent.

But the bigger question is how many people will decide to use AOL’s services when they are free, and no longer attached to the company’s dial-up software. Is it too late, or can the company make some kind of prodigal son-type comeback?

I meant to blog about this yesterday, but being on dial-up in the middle of a thunderstorm kind of put the kibosh on that idea. A blog search-analysis tool called Enquisite — which I have been testing for a little while now on this blog — launched on August 1, and is well worth a look if you want to drill down into the details of where your site shows up on the various search engines and why. As my friend Mark Evans notes, it isn’t the type of tool you’re likely to use if you just run the average blog. But if you are running a business site and want to fine-tune your search placement, my sense is that Enquisite could definitely help.

There are plenty of search-analysis tools out there that will tell you what keywords people typed in to get to your site and that sort of thing, but Enquisite (which is based in Victoria) gives you an incredible amount of detail about everything related to search and your site, including what page of results your site turned up on for various terms, and allows you to compare the positioning on different search engines from a bunch of different perspectives. Enquisite also says that it is able to do this without actually querying the various search engine indexes, as many tools do (something the search companies frown on). How it does this is a closely-guarded secret, and the subject of several patent applications.

Amid the news that YouTube has beaten MySpace when it comes to Web traffic (a stat that we should all be somewhat skeptical about, since it is based on Alexa data, as Pete Cashmore points out over at Mashable) there is increasing attention being paid to the fact that YouTube’s success is based largely on two things: copyright violations, and “user-generated content” from which the users in question see absolutely no return whatsoevers.

Obviously, some of those posting their skateboard tricks or a buddy’s lip-synching routine to YouTube get such a huge charge out of seeing their stuff on a website that they don’t really need any more compensation for their efforts — but for those who would like to see a little something in return for all those millions of downloads, there is always Revver. As Scott Karp points out, the guys at Eepybird who did the Diet Coke and Mentos video got $30,000 because their video clip was posted on Revver, but lost out on that much or more because it was also posted to YouTube. Amanda Congdon and Ze Frank have both asked downloaders to post their stuff to Revver instead of YouTube.

It’s possible that the Mentos guys wouldn’t have gotten quite as many downloads from Revver if people hadn’t seen it first on YouTube, but even assuming that’s true, they still deserve some compensation for their work, and the best way to accomplish that seems to be Revver. Why haven’t YouTube or Google Video tried to build the same kind of model that Revver uses? Maybe they’d much rather keep the cash for themselves. In YouTube’s case, they probably need it to pay their gigantic bandwidth bills. (Lulu.tv, Eefoof and Flixya also pay submitters of video).

I think the latest Pew study on newspaper and online news readership is worth paying some attention to, and I say that knowing full well that by the time I’m done I will wind up agreeing (again) with Nick “the Voice of Doom” Carr, and God knows I hate to do that (David Newberger has a good overview of the report here). One of the important points is in the second paragraph:

“For the most part, online news has evolved as a supplemental source that is used along with traditional news media outlets. It is valued most for headlines and convenience, not detailed, in-depth reporting.”

As Nick notes in his post: “The upshot is that online news appears to be not a replacement for traditional media but a supplement to it. The people who tend to use online sources are the same people who read newspapers and watch news shows on TV. They take a quick look at headlines online, but they continue to rely on traditional news sources for the details.”

It’s true that this might weaken the “Internet will kill newspapers” argument, but then I’m not sure anyone actually believes that, even Jeff Jarvis. The fact is that the two serve very different purposes — and those different purposes are likely to continue to widen, as news moves online and newspapers focus on analysis and local coverage (if they’re smart, that is).

Does that mean newspapers are home free? Not really. They still have to worry about getting the mix right and beefing up their online operations, because younger news readers are not moving to print. As Greg Sterling notes:

“Younger Americans are not adopting the habit of reading the newspaper in print. Just 22% of those under age 30 report reading the newspaper in print on the previous day, down from 29% a decade ago. Newspaper websites make up for much of this loss. In fact, the very youngest adults surveyed ­ those ages 18 to 24 ­ were slightly more likely to have read a newspaper this year than a decade ago, due in large part to their increasing use of online newspapers.”

I’m going to do something I don’t usually do, and that’s disagree with my friend and fellow meshconference.com organizer Rob Hyndman on the subject of whether CEOs should blog or not — sparked by the New York Times article on the subject. Rob says that he doesn’t see how a CEO could possibly have the time to blog, since most of them are fanatically busy, and that he “doesn’t get” claims that CEOs or political candidates should blog.

I can totally see the point that many CEOs are extremely busy trying to run their companies or put out fires of various kinds, or simply trying to understand the various forces acting on their businesses from day to day — and Mark Evans, in a comment on Rob’s post, also makes a good point when he says that CEOs have to be aware of Sarbanes-Oxley and other legislation that ties their hands when it comes to disclosure. All that said, however, I still believe that there is a place for a blogging CEO.

Obviously, not every CEO is going to be Mark Cuban, nor is every one going to be Sun CEO Jonathan Schwartz or Edelman head Richard Edelman. And I don’t think anyone would expect a busy CEO, or political candidate for that matter, to blog religiously or obsessively. But I think the direct conduit that a blog — even a sporadically updated one — offers between a CEO and his customers or clients, or even his own employees, is a very valuable thing. Surely a few minutes here or there could be found by just about any CEO to try and keep that conduit alive.

Walking along the street, you decide to make a phone call with your cell. Pulling out your phone, it detects a wireless signal and logs on automatically, allowing you to make your call by Wi-Fi instead of using your expensive cellular service. Sounds great, doesn’t it? And hopefully, someday, that dream will come true and we’ll all be able to do just that. How close that vision might be is an open question, however.

A piece in the New York Times has gotten plenty of people excited about the prospect, given the interest expressed by companies like T-Mobile, Cisco and Earthlink. T-Mobile, for example, says it wants to let users switch seamlessly from its cell network to Wi-Fi hotspots it owns, which sounds great. But what if you want to use your phone in someone else’s hotspot — how easy will that be? Will you have to sign on and authenticate yourself every time, and/or pay your provider?

I’m as excited as the next guy about the idea of using Wi-Fi to make Skype calls instead of cellular calls — but I don’t think the carriers are going to make it as easy as I might like it to be, and I think we could wind up with a mish-mash of standards, charges and procedures. As usual, I think Om Malik has the right mixture of enthusiasm and skepticism on this one.

My thanks go out to Jason Kottke, whose remaindered links provide an almost endless source of great material for reading and thinking, for a recent link to an essay by Paul Graham, the programmer turned venture capitalist/incubator guy. Paul writes blog posts too, but he also writes thoughtful essays about all kinds of things — and the latest one stemmed from speeches he made at Usenix and another conferenceon Rails, about the benefits of being marginal when it comes to designing software or starting companies.

As Jason says, the essay is “filled with odd conclusions and unfair assumptions, but the general ideas are interesting to consider; lots of food for thought in this one for me.” Among the things that caught my eye as I read it were these great bon mots:

“I think that’s one reason big companies are so often blindsided by startups. People at big companies don’t realize the extent to which they live in an environment that is one large, ongoing test for the wrong qualities.”

“Outsiders have nothing to lose. They can do risky things, and if they fail, so what? Few will even notice. The eminent, on the other hand, are weighed down by their eminence. Eminence is like a suit: it impresses the wrong people, and it constrains the wearer.”

“The very skill of insiders can be a weakness. Once someone is good at something, they tend to spend all their time doing that. This kind of focus is very valuable… but focus has drawbacks: you don’t learn from other fields, and when a new approach arrives, you may be the last to notice.”

Great stuff. Thanks Jason — and thanks, Paul.

During all the discussion of the Long Tail that went on recently between Lee Gomes and Chris Anderson — with Nick Carr playing the part of the umpire — one of the things that got talked about was “hits” or “stars” and whether they can come from the tail or not. I was thinking of that when I read the recent Economist piece on a popular MySpace personality named Christine Dolce, who likes to go by the name ForBiddeN (if you have to ask why, then you are out of the loop and should go back to watching old Rockford Files episodes).

Ms. Dolce, who happens to be blonde and rather chesty, seems to like lots of mascara, Johnny Depp, people with piercings and a kind of S&M vibe with lots of denim and rippling muscles (not necessarily in that order), and she has created her own line of clothing called Destroyed Denim, as well as advertising a line of cologne — “the only cologne with REAL sex pheromones!” — and now she has a deal with Axe deodorant. Ms. Dolce apparently gets more than 800,000 hits a day and has been crowned the “Queen of MySpace.” Playboy pictorials are rumoured to be in the works, and she has been written about in Business 2.0 magazine and the Wall Street Journal.

Where did Ms. Dolce come from? Who knows. She’s a makeup artist who is busy creating her own brand, just like rock singer and MySpace hot property Tila Tequila, who reportedly has over a million MySpace “friends.” Are either of them any less real or any more fake than N-Sync or Dog the Bounty Hunter or anyone on just about any reality show or American Idol would-be star? Not really. But they are busy making themselves, rather than having others make them. How will MySpace handle this, Scott Karp wonders. Good question.

There’s an interesting interview on John Battelle’s blog with Bill Gross of Idealab, the guy who created (among many other things) a pay-per-click, search-based advertising company called GoTo, which became Overture, which was then bought by Yahoo. In fact, although John doesn’t mention this in the lead-up to the interview, without Bill Gross and GoTo there might never have been a Google — or at least not the $120-billion behemoth that controls over half the online advertising market.

According to someone who spoke to one of the VCs that invested in Google in the early days, the company had no clue what it was going to do to generate money, until it decided to “borrow” the pay-per-click search-related ad model from Overture. Fast forward a few years and presto: Larry and Sergey are billionaires, and Bill is… well, still working, and apparently not having the best time financially, according to rumours. Maybe Google could throw him a bone — or at least let him come by and help himself from the free candy room.

Tony Ruscoe, a programmer who became famous (in the blogosphere at least) for discovering the Google Base domain before the search company launched it, was poking around in Google’s attic again and found some new potential services that Google seems to have waiting in the wings, including Google Real Estate, Google Guess, Google Events and Google Weaver. Here are some other services that Google, the company with attention deficit disorder (or is that “diversify at all costs” disorder?) is reportedly working on:

• Google Laundry (email a request, clothes are shipped FedEx)
• Google Shoe-Size Estimator (still in beta)
• Google Change (send in your coins and get Google Checkout credits)
• Google Calculator (with sine and cosine functions, naturally)
• Google Lawn-Care (only available in San Francisco)
• Google Timekeeper (a virtual desktop clock)
• Google Therapy (a version of Alice the chat-bot)

Isn’t the Googleverse a wonderful place to live? On an unrelated note, how many kids with ADD does it take to screw in a lightbulb? Answer: Hey, let’s go ride bikes!

So the Rolling Stones — arguably the world’s oldest rock band — are the latest lure to get eager music fans listening to a concert via their cellphone (other such concerts have featured lesser lights such as Daddy Yankee and Rihanna). As Carlo at MobHappy and others note, you get just 7 minutes for your $1.99, and you can only listen for 14 minutes in total no matter how much you want to pay. Why? Because of fears of bootlegging, believe it or not — like someone is going to rip the entire concert from their cellphone.

Even without that kind of asinine restriction, the Listen Live Now service leaves me cold. Yes, I would love to hear the Stones live without having to fly to Paris and pay $350 or whatever their tickets cost now. And yes, I know that the sound doesn’t come from some drunken groupie holding their phone up in the air but straight from the Stones’ soundboard, as BusinessWeek breathlessly informs us. But it’s still $2 for 7 freaking minutes — and it could easily be the 7 minutes when Keef forgets where he put his guitar, or when Charlie has to be taken backstage to refill his oxygen tanks.

I’m with Ethan Kaplan, director of technology for Warner Brothers, who wonders on his blog Blackrimglasses: “When will (most) bands realize that bootleg recordings of shows are the best inner and post record cycle marketing tools they have?” Of course, the Stones need marketing like I need another hole in the head, but Ethan’s point is a good one. More bands should do what Pearl Jam does, and sell their own “bootlegs” of every concert directly to their fans.

But then they wouldn’t be able to get $2 for 7 minutes, nor would they be able to help the evil phone companies find new ways of extorting money from their hapless users. And thanks to commenter Peebs for this link.

Robert “I used to work for Microsoft but now I work for this little podcasting startup” Scoble, aka The Scobleizer (who apparently got his name at a previous job because he liked to install all kinds of beta software on people’s machines — which then became known as “Scobleizing” them) hates the Internet.

Chad Hurley, the guy with the surfer-dude name and the hottest Internet-media property going — namely YouTube, home of classics such as the Diet Coke and Mentos video — seems to be reading from the standard Web 2.0 (or Bubble 2.0) playbook in his recent media appearances, including his It Girl role at Allen & Co.’s media confab earlier this month and a recent interview with Internet columnist Bambi Francisco of Marketwatch (Chad Hurley, Bambi Francisco — you can’t make this kind of stuff up).

Are you going to sell, Chad? No way — we want to remain independent, we’re trying to build value, long-term vision, etc. etc. (see previous playbook entries under Facebook and Skype); Your company’s value has soared to $1-billion or so, hasn’t it Chad? I don’t really know — we’re focused on long-term value, we don’t think about that kind of thing, etc. etc. But then Chad slipped a little and said he might consider an IPO, and you could almost hear the sharks swarming for the chum in the water, some of them looking to cut Mr. YouTube down to size and some eager to help him fleece, er… assist the investing public. Would it fly? Some IPOs haven’t done so well (hat tip to Paul Kedrosky for the link)

Meanwhile, competitor Revver — which has a similar setup but takes the additional step of sharing revenue with those who upload videos (which is why the Diet Coke and Mentos boys asked people to upload their clip to Revver rather than YouTube) — has gotten additional financing from the funding arms of cable giant Comcast and Ted Turner’s new-media outfit. Draper Fisher Jurvetson is also a backer of Revver, as is William Randolph Hearst III (who spent some of the family dough during Bubble 1.0 too, by investing in cable-Internet flameout @Home).

Is Chad’s potential IPO a sign of Bubble 2.0? The inimitable Ze Frank has some thoughts.