If Craiglist wasn’t “profit-agnostic” how much would Google be worth? Think about it: The run up in Google’s revenues, profit, stock and market cap has to do not just with how profitable the business is, but also with the fact that investors view it as the best play on both the Web and the destruction of print media.
So since Craigslist has itself done a lot to suck out the value from newspapers, you have to wonder, would Google be worth as much as it is worth today if investors could buy stock in Craigslist too?
After all, Google is more of a classifieds/listings business than a traditional advertising business. Yes, classifieds is a subset of advertising, I know that, but hopefully you know that I mean: if we were to rank Google relative to other “listings” business and Craigslist was a comparable, would it trade at such lofty multiples?
Anyway, Craig Newmark and Jim Buckmaster have other things to keep them busy these days.
1 - Why does everything have to be ad-supported? Certainly not social networks.
I don’t think social networking sites lend themselves to advertising. The NYT has a story about a lackluster P&G/Facebook campaign. I’ve covered this theme on this blog, but in essence, social networking is about communications, and every other communications form on the Web - be it email, message boards or chats - have not proven to be cash cows with regards to advertising. Social networks will be no different.
2 - Monetizing video streams awfully reminiscent to monetizing search queries.
In 2000, I worked in the search engine space. We all knew that a search query was a valuable action, but we didn’t know how valuable. Google borrowed GoTo’s model and the rest is history. While search conveys intent, video (and content in general) conveys interest.
I think video as a business model in 2009 will be awfully similar to 2001 when search as a business model took off.
It’s a matter of time.
Can you think of any two bigger phonies in a contest:
in the one corner, eBay; in the other, Craigslist. One was started a brazen capitalist who like to promote socialist tenets in a veiled attempt to take the focus away from their massively profitable business that is applying crazy pressure to their peers, and the other is… oh wait, that described both companies.
Read more about this here: eBay was stupid for buying the 25% stake, didn’t it seem odd that every other would be buyer balked once they understood that Craigslist would not cede control, one bit. What did you think? On the other hand, what on earth do Jim and Craig think? That eBay would simply let its massively valuable but locked stake sit there idle.
As a judge told me one time:
You want to start a company that gets the attention of big business? Congrats, you did. Welcome to the big leagues, big boy.
Read more:
Why companies who invest ask for control.
13 Most Explosive Startups.
“Put the bong down, the honeymoon is over” is the only message I can walk away from this news that eBay is suing Craig Newmark and Jim “master of my domain” Buckmaster of Craigslist.org (for the record I think Jim was right to ask for the craigslistblog.org domain, but wrong the way he handled it). But that was so last week, this week it’s not bloggers, it’s lawsuits from eBay.
When eBay bought the roughly 25% stake (turns out it was 28.4%), Newmark was quoted as saying: “[eBay and us] share the same moral compass, they’re good partners”. I thought it was hogwash: either Craig was naive or delusional, possibly both. eBay did not invest in Craigslist because they needed to share morality or determine which way was north. They did it to get into the listings business, and when Craig pushed back, eBay launched Kijiji.
But if you read eBay’s version of the facts here, you would think eBay was the victim and Craig/Jim the devils:
In 2004, after negotiating the transaction with craigslist’s board, eBay acquired a minority ownership interest in craigslist of 28.4 percent.
In January 2008, however, Newmark and Buckmaster adopted measures that, among other things, unfairly diluted eBay’s economic interest in craigslist by more than 10 percent. By taking these unilateral actions, eBay believes that Newmark and Buckmaster breached their fiduciary duties in violation of Delaware corporate law.
“The recent actions by the craigslist directors have disadvantaged eBay and its investment in craigslist,” said Mike Jacobson, eBay Senior Vice President and General Counsel. “Since negotiating our investment with craigslist’s board in 2004, we have acted openly and in good faith as a minority shareholder, so we were surprised by these recent unilateral actions. We are asking the Delaware court to rescind these recent actions in order to protect eBay’s stockholders and preserve our investment.”
The matter will now be resolved in court… maybe Craig can take some of those millions and offer to buy ot eBay, what’s the alternative? Raise PE or VC to do that… he’s idealistic, not crazy.
But jokes aside, in this bizarro world scenario:
eBay = VCs
Craigslist = entrepreneurs / company.
In the world as we know it, ’tis the VCs who try to reduce the holdings of entrepreneurs through term sheet fine print items and boardroom shenanigans, but in this case, the entrepreneurs are trying to pull a fast one (allegeldy) on the investors.
I think this is why some investors want control and why companies rarely invest as minority investors.
Paid Content refers to a NYT article on CBS which calls for the company that Bill Paley built to make digital acquisitions, which begs the question: should they go for a big purchase or make small moves?
Of course, answering that question alone without addressing the backdrop to that question yields an incomplete picture.
CBS has hit some rough patches, according to Paid Content:
The parent company is under a mini-siege of sorts about
a) its performance,
b) Leslie Mooves’ salary,
c) Katie Couric’s disastrous tenure at the company,
d) layoffs (even on the digital side, as others are ramping up) and other issues (…)
e) CBS’s need for an acquisition is becoming apparent. Some CBS executives privately agree.
All right. I want to dive in and comment on e) but let’s run through this list quickly.
a) Its Performance
We’re not sure if they are referring to its financial performance or its stock’s, either way:
As per the NYT:
“Without the cushion of Viacom’s other properties, CBS has been more exposed to the struggles of the advertising market. In 2007, it earned $1.25 billion, down from $1.66 billion the year before. CBS stock closed at $21.40 on Friday, compared with $30.99 a year earlier.”
While no company or manager can control what happens to the stock price, I think big media will see a lot of revenue loss over the next few years. Print-centric media companies shrank, why would TV or radio-centric media companies be any different in the next wave of the Web’s growth?
After all, 1994-2003 saw text-based media explode online, 2003 is about audio/video-heavy media.
CBS is seeing this sooner and faster due to its exposure to TV and radio. However, they are strong in outdoors, the challenge there is the upside there won’t account for the downside in more traditional media.
So all hope signals point to online… which explains why:
“On Monday, the company’s interactive unit will officially open a fully staffed office in Menlo Park, Calif., in Silicon Valley, to stir innovation and content development.”
Ironically, the CBS Interactive brass gets the Web quite a bit, but it’s true that they have been overly cautious, too. Being cautious is a bad thing in booming times and a great thing in corrections. The problem for CBS is that the correction is coming offline and online continues to charge ahead… so indeed, CBS does need to make some bold moves. But what are those moves?
Last year, we suggested an outright merger with Yahoo! With MSFT’s $45B gamble, those bets are off (hmm… are they?).
b) Leslie Moonves’ Salary
Last week Henry Blodget wrote: “CBS CEO Moonves Gets 29% Raise, Just Reward For Job Well Done“.
Clicking through, I realized he was being sarcastic by pointing to the seemingly inverse relationship between Mr. Moonves salary and CBS’ performance. While I appreciate Henry’s position, the truth is that CEO pay is determined on a number of things, frankly.
It’s also about the demand and supply for talent. As the CEO of CBS, Mr. Moonves could probably command a much larger salary elsewhere, if CBS’s Board wants to pay him $100M because that is what it takes to retain him, I am not sure CBS or Moonves should be blamed. For the record, he did not make $100M but rather $37M. Is that a lot of money? Yes. But the company made well over a billion dollars in profit and $14B in revenues. Of course, I’m an executive so my perspective is going to be different than that of an analyst or journalist.
But my point is: running a shrinking business in a mature market is not something most executives would embrace, to lure the best (or retain them), guess what? It takes a generous compensation program.
c) Katie Couric
Don’t care personally, but indeed, this is becoming an albatross and if indeed she is that horrific (I don’t watch TV), it’s time to try something else. I recognize she might not be best suited for news, but surely there is plenty of things she can be doing for CBS in other capacties (infotainment, mainly).
d) Layoffs
Layoffs are always demoralizing, especially when a company is making over $14B in revenue and remains profitable. But what about a case - like this one - when the company is shrinking? This is a tough question.
My gut says Jack Welch’s “the lowest 10% should leave” is not a bad thing… so while I don’t want to dehumanize the layoff dynamics and their effect, I think it’s unfair to question the layoffs.
Of course, I do wonder why layoffs are taking place in online areas… which is what both Paid Content and NYT refer to. But just bear one thing in mind: many traditional media companies are not necessarily well structured in new media; divisions and structures are sometimes borne out of legacy organizational systems and sooner or later a correction or adjustment is called for. If this is the case, then I don’t think it’s fair to bash CBS on this point.
e) Acquisitions
The question remains: should CBS make one big hairy and ambition acquisition or should it buy a number of smallish companies and roll them up and/or foster their growth?
For the record, CBS has done both. In fact, it’s done everything including investments in Spotrunner, Joost and many others. In terms of acquisitions: Last.fm was a mid-sized / big one; Wallstrip was a small one.
What would you do if you were Quincy Smith and company? Buy? Merge? Sell?
ACQUISITIONS:
You know what, I admit a small acquisition won’t move the needle, but a major acquisition won’t either. Who would they have bought?
- Bebo? Is a company that marketers love really well-served by serving advertisers social networking inventory? Nope.
- Facebook? Too expensive to buy. Nothing to see, here (perhaps a merger? See below).
- Gawker Media? That might be an interesting addition. But I think Gawker Media founder Nick Denton wants to become CBS, and not sell to CBS. Anywa, Gawker Media lags in video, CBS needs to look ahead and not look back.
- Speaking of video, one company that might position it for future growth is Blip.tv, but Blip.tv does not own any content… so that is a risky move because CBS might buy a great video platform with amazing bells and whistles but then lose all of the content therein. [Disclaimer: Blip.tv is a partner of WatchMojo.com]. In the same broad category as Blip.tv are Brightcove and Video Egg. Bright Cove also does not own any content and is way too expensive, having raised $80M in funding. Video Egg ain’t cheap either, with $40M of funding in the tilt.
- Then there’s all of the YouTube/MySpaceTV competitors: Revver, Veoh, Metacafe, DailyMotion, Break, etc. Mind you, CBS invested in Joost… so what message would that send? As well, Revver was on the auction block and I presume CBS looked at it and then balked. Again, none of those companies own any content, CBS needs to be stronger in web content. That would be the hedge for CBS going forward, of course, it also needs better distribution. I see CBS works closely with Veoh… but is Veoh big enough as a distribution source? [Disclaimer: WatchMojo.com syndicates video to all of the sites listed here]
- Craigslist.org? Not sure Craig Newmark would sell, no matter how progressive Quincy’s team might be. This is Big Media after all… but Craigslist.org would not unleash CBS’ digital revenues.
- Glam Media? That would be a shot in the arm with regards to bolstering its female audience online… but here’s the problem: female audiences still watch TV… what CBS might be better suited for is getting access to a men’s audience. [Disclaimer: Glam Media is one of WatchMojo.com’s syndication partners, too]
- Digg? Not a fan of this one, frankly. Maybe a combo Revision3 / Digg? Even less of a fan of that. Revision 3 is way too niche: it’s too tech-oriented and relies on two hosts, largely. Given how Kevin Rose’s interest waned from Digg to Revision3, then to Pownce, I am not sure he’s buyable because he’s the main asset of Revision 3. [Disclaimer: if you look very broadly at all video content, then WatchMojo.com is more or less competitive to Revision 3, though I view them as rather complementary to our programming].
- Federated Media? Too tech-focused and they don’t own any of the content on the blogs they rep. Big media needs to own content to make it worth their while. Sorry, but that’s just the way media works.
- Gorilla Nation Media’s audience might be a better fit, but as an advertising representation firm, it faces the same challenges: You are buying a stack of contracts that at any point could be severed. Unless you own the underlying content, those contracts are not worth the paper they are printed on.
- Heavy.com? They have a men’s audience, for sure. But if CBS is to buy a destination, it needs to be an enormous destination, I am not sure Heavy.com would move the proverbial needle. In fact, in 2005, News Corp. bought IGN Entertainment, but IGN was doing over $70M in revenues on the strength of its Media Properties (IGN.com, RottenTomatoes.com, etc.), had a lot of technology (in-game advertising + digital distribution of movies, music and games). Moreover, IGN Entertainment was far and away the leader in terms of men’s 18-34 audiences.
However, if Fox Interactive Media has become a new media behemoth, it has more to do with MySpace’s burgenoning audience than with IGN’s properties. That being said: IGN Entertainment does give a lot of content and audiences that marketers look for. The challenge for IGN is that a major chunk of their inventory comes from their message boards, which are notoriously hard to sell and monetize.
This being said, when one looks at how instrumental MySpace and IGN’s acquisitions were, it’s fair to say that the ROI has hitherto been higher on the MySpace deal. I am surprised at this, I won’t lie. But this lesson would encourage CBS to look for a MySpace and not an IGN.
I am not that familiar with Heavy.com’s business, frankly, but I am not even sure if Heavy is an IGN.
- IAC is way too e-commerce oriented. Its search engine Ask.com does not really fit with CBS, either. So pass.
- There’s Meebo, but at $250M or more in value… I am not sure if CBS would even know what to do with it. And, who are we kidding: do marketers really even want to advertise in instant messaging communications? That one makes sense in theory but in practice? Not sure.
- There’s the barrage of search video tools: Blinkx, Pixcy, etc., but CBS remains a media company; it should be technology-centric, I think. What I mean by that is that its content should be compatible with all tech platforms to make it was widely available as possible.
- There are a number of ad networks: Tribal Fusion, Specific Media, Casale Media, Adconion etc. I think the obsession over ad networks will pass. Moreover, a lot of media companies will build and launch their own, which is a mistake as well. I am not sure if CBS should plunk down $100-$500M on an ad network. Advertising.com rescued AOL’s butt because AOL was transitioning from a walled garden to a normal website but the fact remains, that says more about how poorly AOL was doing than how great Advertising.com has done (for the record: it has done great).
Valueclick is publicly traded, but expensive.
If it was interested in ad networks, it might as well skip over display ad-based ones and dive into video networks such as Tremor Media or Broadband Enterprises. Again, I am not sure being in the ad network business is the best capital allocation move.
- It could - much like how NYT invested $29.5M in Wordpress - make a bid for Six Apart (makers of Movable Type) or even Wordpress. But, again, I am not convinced it makes sense for a media company to own a platform without the underlying content. News Corp. buying MySpace made sense because the content on those sites become News Corp. property, or at the very least, MySpace gets a license to profit from it…
- Slide? At the company’s last $500M pre-money valuation, I think CBS would gain street cred in one block on SF by buying Slide but see Wall Street punish it. Hey, just being honest here folks: that is one expensive widget company with moutain-fulls of unsellable inventory!
- There’s TheStreet.com, though I am not sure if it’s big enough or whether CBS really wants to get that deep into finance and investments. Bear in mind Wallstrip was all about investing… so this would be a doubling down on one category. Moreover, at a market cap of $250M, it would eat a lot of money the company could spend elsewhere.
- CNET remains very tech-oriented but it has embraced a lot of lifestyle properties, too. In fact, CNET would be a good fit with 100M uniques, $400M in revenues etc. In fact, trading at $1.2B, it’s not that expensive. CNET would give CBS some web DNA and CBS would open up swarms of traditional advertisers to CNET. This could be the best move yet: unlike most other options, CNET owns a lot of content. It also owns a lot of URLs such as TV.com that with CBS’ help could come to life.
Updated: Oh, wow, they listened to me: it’s official.
MERGERS
- CBS could in fact merge with Yahoo! I wrote about this and frankly, this remains an option.
- It could merge with Facebook; won’t happen. At a market cap of $14B technically Facebook is worth roughly the same as CBS. This would be a bizzarro world deal where Facebook trades in growth for CBS’ $14B in revenue… but this one is so loopy.
- As crazy as it sounds, it could undo the merger with Viacom; won’t happen.
SALE
What about a sale to News Corp.? News Corp. owns FOX, it would love to own CBS. But for this to happen, it would mean Sumner Redstone and my old boss Rupert Murdoch would have to come to terms; won’t happen.
Incidentally, last Friday, GE lost 12% of its value, or $40B. It could have bought two CBS’s. By buying CBS, GE’s NBC Universal would own two of the three main networks, making this an impossibility.
That same obstacle is present in a sale to Disney, who owns ABC.
CONCLUSION
As you run down the list… you realize that all CBS is actually a great media company that just needs some tweaking. Yes, indeed: “Nobody likes negative growth, from the guy who shines shoes to the C.E.O. Everybody feels the pain” the truth is no one wants to blow something up either.
My two recommendations for CBS:
- Buy CNET for $1.5B - $2B (that would be a 25% to 66% premium), which would take its digital revenues from “$200M” to $600M. Combining CNET with Last.fm would also yield a lot of upside in digital music and video tie-in’s. But even then: for a company with $14B in annual revenues, does $600M mean much? Many analysts only give credit to a media company’s stock if digital revenues account for 10% of total sales. Even News Corp. or Disney do not claim that.
CNET remains one of biggest acquisition targets that represent meaningful revenue opportunities, and even that won’t move the needle. So what other options are there?
OR
- Merge with Yahoo!
Actually, there’s also one more option:
GO PRIVATE?
One way that no one will care about a) Performance or b) Les Moonves salary is if it were not publicly traded. Moreover, Wall Street is being unreasonable: yes the company is shrinking, but it will take time for digital revenues to grow, anyway. However, if someone came along and took CBS out at $20B, I think a lot of shareholders would buy that (or I guess, sell for that).
It then allows CBS to d) clean house if they so choose to (and will have to). Kate Couric becomes moot in the grand scheme of things… but most importantly, it will allow CBS to roll up a number of smaller web properties, content producers and tech applications to bolster its overall portfolio. In 4 years - when video advertising will be $7.1B in the US (up from $1B) and all online advertising will be nearly $100B in annual expenditure - it can then be go public again…
This might very well be the best course of action. The question remains: does private equity have the stomach for a $20B debt purchase? With $16B in annual revenues… I think so.
All righty, that was a great use of 40 minutes of my time. Back to work.
It was the best of times, it was the worst of times.
I think we’re living in the best of times, mind you, especially if you’re fortunate enough to be on this side of the digital divide. Sure, cars don’t fly - yet, but when you hop on a flight, you can make phone calls and surf the Web. I think that is my description of euphoria (well, the surf the Web part, I hope no one can make calls on a flight).
This week, Blognation called it quits. So did Edgeio. Blognation could not raise funding, Edgeio did and that was its undoing. there’s a common thread between the two, neither business was sustainable. Edgeio was taking on Craigslist, in essence, and neither Google nor eBay have managed to make much headway, the former via Base and the latter via Kijiti. Check spelling on that, please.
Heck, newspapers, once king of classifieds and listings don’t stand a chance against Craigslist, either, and they once owned the space. Mind you, newspapers are clearly on the wrong side of the digital divide.
As per Blognation, I think that is a testament of how web businesses work: start small, scale slowly, and succeed at your own pace. Blognation started big, with bloggers in many nations, and its costs were so far greater than its revenues, and the competitive landscape so fierce, that no investor sought a positive risk profile. Ultimately, Blognation failed to raise money.
Apparently, there are people interested in Blognation, but I wonder, why bother? After all, simply hire the writers and off you go. That’s precisely what one network did. If you think about it, few online companies will be able to justify the overhead of multiple writers until traffic picks up. But with every Tom, Dick and Harry having a blog these days, I wonder if it even makes sense for an online company to poke at the opportunity. In fact, every single company that makes a business by being a blog network (especialy Tech-oriented) was either started by an individual (Tech Crunch, Giga Om, ReadWriteWeb) or launched by a major media company with deep resources.
The only companies for whom it makes sense to make a run at Blognation, frankly, are magazines who make so much money offline that the aggregate salaries of writers scattered around the world would represent a low-cost international news wire. But, guess what, magazines (and newspapers) already have that set up… so why would they bother?
Therein lies the big fat irony of the Web, the companies that can afford to start most ventures that are akin to Blognation and Edgeio are the print companies, and let’s face it, most of these companies only accelerate their shrinking by embracing the Web.
What will 2008 present? I don’t know. But despite all of the talk of bubbles, I think that the Web is becoming more and more logical and pragmatic in determining what should be a business and what should not.
I could not help how ironic it is to read the NYT covering eBay’s launch of Kijiji in the US:
“This is going to be our classified ad play in the United States,” said an eBay spokesman, Hani Durzy. “We look at it as competition to Craigslist and other platforms. But we think there is room for competition.” Mr. Durzy said eBay was planning to keep its stake in Craigslist.
EBay plans to attract users to its new site by buying advertisements on search engines and by ensuring that listings appear in unpaid, or natural, search engine results. There are no plans to direct eBay traffic to the site, Mr. Durzy said.
Craigslist’s chief executive, Jim Buckmaster, said, “One of the beauties of viewing our world through public service goggles is that there is no need to worry about what other companies are doing.
“Many companies offer classifieds, but since we don’t concern ourselves with considerations such as market share or revenue maximization, we don’t think of them as competition, or as a challenge to Craigslist.”
Indeed. But the truth is that both Craigslist and eBay will be larger in a few years, this is really a challenge to the newspapers, who have yet to demonstrate an open and successful classifieds solution.
Related:
I’ve covered the newspaper industry so much in the recent past that you’d almost think I ran a newspaper company. But, I don’t. I work online and count my blessings every day. Yet as online operations fight tooth and nail for every single dollar of revenue, newspaper companies continue to print money.
Here Today, Gone Tomorrow?
Of course, as Washington Post investor Warren Buffett pointed out in his most recent letter to investors in Berkshire Hathaway’s annual statement: “Average daily newspaper circulation in the United States has declined each year since 1987. “ That’s not a pretty looking macro trendline.
But, there’s also some micro problems facing the newspaper industry. Newspapers like all media firms can be broken up into business and creative people.
Monopoly Rules
Continuing to quote from Mr. Buffett: “As one not-too-bright publisher famously said, ‘I owe my fortune to two great American institutions: monopoly and nepotism.’ No paper in a one-paper city, however bad the product or however inept the management, could avoid gushing profits.”
In Buffett’s words, it’s not through management ingenuity that newspapers have become behemoths, it’s through such externalities. Naturally, by now we know that the Web exposes these inefficiencies and brings the orgy of excess to a grinding halt. As such, the only way for the newspapers to shelter their core business and profit from the new media opportunity, it would be argued, is to leverage their balance sheet to reposition operations to inject their income statement with the upside that the digital revolution presents.
An Online Assault
Yet, they’ve done nothing of the kind. Today eBay announced it was moving Kijiji (what?) to the US, in newspaper companies’ backyards. While conventional widsom suggests this is an affront to eBay, it’s not, it’s a dual attack by eBay and Craigslist to the newspapers.
Hindsight is Always 20/20, but Corrective Surgery is Always an Option
We know the brutal truth: the decline in traditional revenues is accelerating faster than the uptick in digital revenues, and that’s partially because newspapers did not invest early enough in new media. Hindsight’s 20/20, because a cynic would argue that if they would have been more aggressive with the Web, it would have cannibalized their offline business sooner, faster. Take the Chronicle, this year it lumped off 25% of its staff, and critics and supporters would argue that the Chronicle was one of the more progressive companies around amongst newspapers.
I myself have encouraged print to go free, but that would simply cannibalize offline revenues faster. So while it’s a long, long term option that might prevail, short and mid term, that’s painful.
I think we’re all - including Mr. Buffett - suffering from a myopic view of things: “Simply put, if cable and satellite broadcasting, as well as the Internet, had come along first, newspapers as we know them probably would never have existed.”
Hmm… true, but then neither would have anything other than the plane, no? Yet we still use horses - where applicable - and cars. That’s an apt analogy, for sometimes the concept of printing content and publishing it on paper to distribute nationwide is as odd as using a horse to transport goods from coast to coast. It’s backwards, and if horses could write, we’d probably still be using them.
Business meets Creative
In other words, while business is half the equation, part of the problem (and solution) of newspapers is the creative.
Please, hold off on the attacks until you read the end.
Mr. Buffett’s comment is akin to rewriting history, but history is being written as we speak and it’s being written by a generation that doth not pick up papers.
While I have long encouraged technology companies looking to profit from advertising to buy, invest and own content, I don’t think for one second any one of them to acquire NYT; MSFT won’t, Google won’t, neither will YHOO. IAC might, but I doubt it will. It can’t really afford to.
IAC, of note, is looking increasingly into social media, as is Yahoo! Frankly, they’re lazy. But more on that later.
The Social Media Myth
One of the more prevalent themes is the notion of social media. This has impacted news and changed the dynamics for good.
Social news and social media is not - or rather, should not be - about empowering citizens to become journalist, because everyone these days can pontificate and become a journalist. Ages ago, business became a discipline at school and that made business lose some of its lustre because anyone could technically become a businessperson (it was believed) by earning a diploma. Nonsense! The same could be said about journalism. What makes someone a journalist has nothing to do with what they studied; it’s a set of skills, interests, and lifestyle, frankly.
These days, with all due respect, you need to demonstrate a hustle and entrepreneurial spirit to succeed as a journalist. In other words, whether the powers that be at DJ, NYT, WPO, etc. like it or not, the very definition of journalism has changed because the times have changed, if they choose to evolve and adapt with the times, then they will make up the definition of journalism in the future, otherwise, they will be as relevant to the ecosystem of communications as brokers or travel agents are to the marketplace of securities and trips.
But given that everything is connected: how can journalists be expected to become entrepreneurial if management (business people, basically) is risk-averse?
Sow What You Reap
They did not invest during the 1990s. Not sure they’re investing properly today, either.
In fact, once the newspapers invested in Topix, it seems that went off the rails. It’s done admirably well, cracking the Top 20 news sites, but at first glance, Topix had top 20 site potential, not just Top 20 news sites potential.
And, history also suggests that when the newspapers backed CareerBuilder, it gained traction, something I documented here, for the love of all things holy, the post was called “Craigslist Achilles Heel”.
Why on earth them do companies like NYT suffer from inertia then? I’d be scooping up companies right and left and investing in new technology. Yet, given the size of these enterprises, the opposite is happening: the NYT launched Times Select, for example, going against the grain of every trend and case study online. Every day that passes by, the more irrelevant you become by behind walled gardens. Is there no one from About.com that can sing the praises of openness to HQ at the NYT? I myself used to think that it’s good to have a dual strategy: both free, ad-supported and paid subscription-based… but there’s way too much money being shifted from offline to online and not enough people willing to pay for content, so that argument is blown away. You’d think of all people, companies like NYT who have seen their revenues and market cap erode would be the ones singing the praises of free, ad-supported content online…
The prevailing wisdom is that by bringing internationally-focused Kijiji to the US, eBay is taking on Craigslist.
That’s not the case. Craigslist is growing too fast to give a damn, frankly. And, as everyone has mentioned by now, eBay is 25% owner of Craigslist, they also have a board seat. While Craig Newmark might not say so, one day, he’ll get tired of being the CSR extraordinaire at Craigslist and want to sell. Trust me, it’s a matter of time. He won’t sell to MSFT, won’t sell to Yahoo!, won’t sell to Google, either. Not sure beneath the bravado Jim Buckmaster or Craig appreciated Google Base. What’s Google Base? Exactly.
You might have forgotten, but Craig has not forgiven.
He’ll sell one day, and it will be to eBay.
Today’s move is about creating a sense of competition between Craigslist when in fact it will further checkmate newspapers who seem to be increasingly clueless in the online classifieds space.
Newspapers should be taking this fight to the Web giants, but the mere fact that eBay can launch, in the phonetically-challenged American land, a site called Kijiji and become somewhat successful while newspapers continue to build tallen garden walls speaks volumes about where newspapers will end up if they keep these genius tactics up.
PLAY
