Google’s Schmidt: Brands to clean up Internet ‘cesspool’ – Or is it low eCPM?

Ed: Cesspool? Is the cup half empty or half full? 

Publishers have the brand advantage, not because of good writing, but the credibility of paper. Like the early days of ecommerce, brick-and-mortal had the branding advantage, but carried with a huge opex.

Google cannot solve the low eCPM problem. That’s the challenge for online publishing.

Google’s Schmidt: Brands to clean up Internet ‘cesspool’

Google CEO Eric Schmidt

(Credit: Dan Farber)

According to Google CEO Eric Schmidt, the Internet is a “cesspool” where false information thrives. As reported by AdAge, Schmidt was addressing his remarks to magazine executives who were on a pilgrimage to the Googleplex.

The cesspool is one of the byproducts of the Internet. With no barriers to entry and nearly frictionless production and distribution, it’s easy for false information, lies, doctored images, and other forms of deception to infiltrate the Internet. Web crawlers aren’t particularly good at making judgments about the truthiness of digital matter, and the wisdom of the crowd can’t keep up with the river of data streaming online.

Schmidt gave the magazine publishers hope for their future. Brands, he said, are the way to rise above the cesspool, and of course he is right. The corollary is that advertising via Google and its brethren is an essential way to build and sustain a brand.

But brands, even those with long, venerable histories and massive ad budgets, can be decimated as we have seen over the last decade and in the current economic nuclear winter, with banks, automakers, publishers, and retailers fading away.

Offline revenues, especially for newspapers, have been in steady decline, and online revenues are not making up the difference. As a result, there is less editorial investment from so-called mainstream media in the primary and investigative reporting that is often fodder for blogger refactoring. But the blogosphere and newer online publishing entities, such as GigaOm, Politico, TechCrunch, Huffington Post, and VentureBeat, are bringing new, or at least alternative, voices into the mix, contributing far more to the good side than to the cesspool.

Schmidt and the magazine publishers reportedly expressed concern about the cost and quantity of what high-value (exemplary journalism) content. “Narrative sustains the [media] business…but the future of high-quality journalism is a huge problem. A reasonable prediction is that there will be fewer voices. More money is needed to fund high-quality work,” Schmidt said as reported by the Huffington Post. With a major economic contraction underway, funding high-quality work will become even more difficult.

Relying solely on advertising revenues hasn’t proven to be a winning strategy for most publishers. Unfortunately, Web users come from a place in which paying for content is not part of the culture. If people are willing to pay $4.99 for six hamburger buns or $3.50 for a simple cup of coffee, why aren’t they willing to pay for content they value? One can only assume that people are willing to settle for content of generally less value that is free of charge–or that hamburger buns are more essential to life than a good, well-researched story.

» Read full article on[Outside the Lines]

Reed Business’ Auction Running Into Trouble?

by Rafat Ali

Reed Business Information’s second round auction may be running into trouble, as bidders are lowering their prices, reports Times UK. There are no bids close to its £1.25 billion ($2.5 billion) asking price and there is talk the unit may be worth as little as £800 million ($1.6 billion), the report says. Yet, there is still hope that Reed may be able to sell as a whole, with Bain Capital believed to be particularly interested, the story says. Is the piecemeal sale still possible? As for who’s in and who’s out in second round, read this.

Us Losing Thousands Of Subscribers Over Palin Cover

Maybe it should have been obvious that the celebrity weeklies were going to politicize as soon as Hillary Clinton and her supporters showed strong resistance, during the primary season, to acquiescing to Barack Obama, thus highlighting the importance of women voters in 2008. But the heightened political importance of the magazines, whose readers are overwhelmingly female, wasn’t in anyone’s face until this week, when Us Weekly made waves with its controversial “Babies, Lies & Scandal”Sarah Palin cover. The issue, unflattering to Palin, has so far resulted in 5,000-10,000 cancelled subscriptions, MSNBC.com’s gossip column is reporting. More ominously, Us advertisers are starting to feel pressure, and MSNBC reports there is worry about cancelled ads:

 ”(Us publisher) Jann Wenner supports Obama, Wenner media decided to follow the buzz around Palin before her speech, and now subscribers feel like a vote has been cast on their behalf,” says another magazine editor. “It’s going to be tough to bounce back from this one. Especially if the advertisers get involved. If they get nervous, that can hurt all of us.”

It’s easy to imagine the other shoe dropping in this publishing psychodrama: Wenner rival Kent Brownridge, newly installed at Us competitor and celebrity-servile OK!, makes a play for access to Palin, a (sigh) rising political star whoseRepublican convention speech drew 37 million TV viewers, nearly as many as tuned in to watch Barack Obama. If that happens — Presto! You’ve got MSNBC (Us) and Fox News (OK!) recreated among the celebrity weeklies….

Reed Business’ Auction Enters Second Round; McGraw Hill In Serious Contention; Nielsen Interested?

from paidContent.org by Rafat Ali

Reed Business Information, the B2B magazine unit of Reed Elsevier (NYSE: RUK), is moving closer to sale, as the bidding enters the second round, after about 12 bidders in its first round. UBS, the bank for RBI, has invited McGraw-Hill (NYSE: MHP), the parent of BusinessWeek, and PE firm Bain Capital, among others, to continue. The first round valued the company between $1.87 billion and $2.33 billion, reports WSJ…most of the offers were bunched around the mark, so most of the first round bidders will continue into the second. Other bidders include Providence Equity Partners, Apollo Management

For McGraw-Hill, it has submitted a joint bid with PE firms firms Advent and Quadrangle, TPG and DLJ Merchant Banking together, and Cinven and Candover, also together. Meanwhile, interestingly, Nielsen, which owns Billboard and The Hollywood Reporter, has also shown interest in RBI, reportsTelegraph, though not clear if it submitted a bid. This as rumors continue on its own business media unit being up for sale. Check our RBI section for the progress of the sale process.

Reed Business Sale Expected As Early As October; Gruner & Jahr Now Interested

from paidContent.org by Robert Andrews

Reed Elsevier (NYSE: RUK) expects the sale of its Reed Business Information trade magazine unit to complete as early as October. In a memo seen by Dow Jones, Marianne van Leeuwen, CEO of the Holland operation, says bids were made for RBI “since last week”. “In the first three weeks of September, the global board of Reed Business will give a management presentation to potential acquirers,” Van Leeuwen wrote, though she said she did not know who the buyers would be.

BusinessWeek publisher McGraw-Hill (NYSE: MHP), private equity house Bain Capital, Providence Equity Partners and Apollo Management have been linked with bids, while Billboard publisher Nielsen was also linked. In half-year earnings last month, Reed Elsevier reported ”strong buyer interest” in RBI. This means we will have a new owner of Variety very soon…

Updated: Reuters reports that German publishing giant Gruner & Jahr is interested in buying the division, citing a German newspaper report…the company exited the U.S. market in 2005 after a disastrous foray buying FastCompany and launching the Rosie magazine. It sold its women’s magazine portfolio to Meredith (NYSE: MDP) and its business magazine portfolio to Mansueto Ventures. 

Topic Pages to Be Hub of New BusinessWeek Site

By RICHARD PÉREZ-PEÑA

Published: August 17, 2008

With advertising revenue sliding, publications try a lot of things online to get noticed, like — pardon the jargon — verticals, aggregation, user-generated content, popularity rankings and even something resembling social networks.

Enlarge This Image

Chester Higgins/The New York Times

BusinessWeek’s online editor, John Byrne, left, and senior vice president, Roger Neal, with a Business Exchange prototype.

BusinessWeek magazine is about to introduce a site that combines some elements of all of the above in ways intended to capture new readers and funnel them into niches that will attract advertisers.

The site, called Business Exchange, is one approach to the fast-evolving digital world, where some news sites that experiment have rapidly expanded their audiences while those that do little more than post articles online have been left in the dust. After two years of quiet development, it will go public in late September, accessible through BusinessWeek’s own Web site (www.businessweek.com).

The core of Business Exchange is hundreds of topic pages, on subjects as broad as the housing market and as narrow as the Boeing 787. Plans call for the number of topic pages to grow quickly into the thousands. (The first one created, which may or may not be in the public version of Business Exchange, was “BlackBerry vs iPhone.”)

A few other magazines and newspapers have also become serious about building verticals, but they tend to jealously guard control of their online audiences and content. Not this one.

Each Business Exchange topic page links to articles and blog posts from myriad other sources, including BusinessWeek’s competitors, with the contents updated automatically by a Web crawler. Nearly all traditional news organizations offer only their own material, spurning the role of aggregator as an invitation to readers to leave their sites.

On Business Exchange, a user can post new material to a topic page, or even create a new page, choosing the subject and the title, and write a brief introductory description. This is hardly a revolutionary idea in the wiki era, but for a mainstream publication, it represents a significant loosening of control. (But not too loose — new topics require editorial approval, promised within 24 hours, and objectionable posts will be taken down.)

“As journalists, we’re good at finding great sources of information and distinguishing what’s important, but we also want to harness the very significant capabilities of our community,” said Stephen J. Adler, editor in chief of BusinessWeek, which is published by the McGraw-Hill Companies. “It only takes a very small percentage of people being active in a topic for it to be really vibrant and valuable for everybody else.”

The site also works as a kind of social network, letting friends, colleagues and rivals track one another’s interests — or, say, Warren Buffett’s interests, if he chooses to play along.

Each user has a profile (photo optional) that contains a personal description and tracks the user’s reading and posting habits. It allows the reader to create a network among other readers, and to import information from a LinkedIn account.

The user can also choose to make the profile public, with all of that information visible to anyone on the site.

Through the topic pages and profiles, BusinessWeek hopes to be able to deliver narrowly focused audiences to narrowly focused advertisers, and even let the advertisers know who those readers are.

“Advertisers want you to prove engagement,” said Keith Fox, president of BusinessWeek. “Ordinary social media are too broad to draw ads, but we can sell display ads reaching a specific audience on electronics or cars or medical devices.”

BusinessWeek wants to stand out in a crowded lineup of news sources on businesses, financial markets, the economy, and personal finance and investing.

In print, BusinessWeek has a circulation of about 900,000, similar to Forbes and Fortune, which publish half as often. (The other top-selling financial magazines, like Money, Kiplinger’s Personal Finance, Smart Money, Fast Company and Inc., do not compete as directly. They are all monthlies, some focus primarily on personal finance, and they tend to have fewer ads or online readers.)

In both print ad sales and online traffic, BusinessWeek ranks far ahead of most other financial magazines, but lags behind its closest competitors. Its Web site draws more than three million unique visitors monthly, according to Nielsen Online, a healthy figure, but Forbes.com gets more than eight million. No directly comparable figure is available for Fortune, whose online presence is contained within Time Warner’s CNNMoney site, with more than nine million monthly users.

In the first six months of 2008, BusinessWeek had more than 900 ad pages, according to the Magazine Publishers Association, while Fortune had more than 1,100 and Forbes more than 1,300. Though print sales have held steady, financial magazines have lost more than 20 percent of their print ad volume in the last four years, and BusinessWeek’s advertising has fallen even faster.

Roger W. Neal, senior vice president and general manager of BusinessWeek Digital, said that as Business Exchange pages work their way up through search engine results, the site should double BusinessWeek’s traffic on the Web within two years, allowing it to sell more ads.

“Increasingly the ad buy in our sector is going to that top tranche of players,” he said, “so we want to get dramatically bigger.”

ESPN Buys Motorsport’s Racing-Live.com, Disney Bags RaisingKids.co.uk

from paidContent.org by Robert Andrews

ESPN (NYSE: DIS) is buying Racing-Live.com, an independent motorsports site founded way back in 1995. Racing-Live.com claims three million monthly uniques and has four sites – F1-Live.com, Moto-Live.com, Rally-Live.com and Raid-Live.com – covering F1, Moto GP, superbikes, rally, sports cars and karting. It was started by Montpellier-based racing fan Michel Marvie – who first began publishing motorosport news to France’s Minitel in the 80s - and has grown to offer live race updates and news in English, French, Japanese, Italian, German and Spanish.

For ESPN, this is another acquisition of a sport-specific indie publisher, following the earlier purchases of Cricinfo and Scrum.com. ESPN International EVP Russell Wolff said the acquisition would complement its Nascar and vintage car TV coverage. Who’d bet against inclusion of results on Scorecenter, too?

As well as editorial, Racing-Live.com also offers premium-rate video highlights. According to Racing-Live.com, the sites will retain their identity but: “Moving closer to a major strategic organisation of international dimension was essential in order to continue the adventure at an ever-higher level.”

ESPN parent Disney’s interactive unit has also purchased RaisingKids.co.uk, a parenting advice site started by child psychologist Dr Pat Spungin in 2001, to add to its portfolio of sites includingUKFamily.co.uk. The site claims over 142,000 monthly uniques and over 100,000 registered users. Neither purchase price was disclosed.

Updated: Nielsen Business Media and Hollywood Reporter: Finally For Sale?

from paidContent.org by Rafat Ali

Updated: Is it? That’s been the speculation for a long time now, and Sharon Waxman, the former NYT reporter, says that Hollywood Reporter and the other 41 trade papers in Nielsen Business Media division is up for sale, citing “two solid sources.” If true, this means that both the major Hollywood trades are on the block, with Variety (as part of Reed Business Information) being in the middle of a sale process as well.

THR’s revenues have declined from a $20 million EBITDA to $9 million, and may drop as low as $6 million in the coming year, according to Sharon. Compare this to Variety, which is doing about $100 million in revenues, though not sure of the profits. THR has been cutting positions of late, and retrenched as much as one-third of its 135 strong staff.

NBM has 40 publications, over 135 trade shows and conferences, and 195 digital products and services, and on the media trade side, including THR, Billboard, Backstage, Adweek, Mediaweek, Editor & Publisher and others. The company is denying the unit is on the block…we’ll see how long that official position lasts.

Updated: Besides Nielsen’s official denials, some other insiders are also pooh-poohing the on-sale sign, and the numbers mentioned in the report, including the EBITDA number. Someone put it very nicely to me: “Unless your new friends at the Guardian want to buy us, who out there is this mystery buyer? And why would they bypass Reed to get us?”