When I was sitting in attendance at Tech Crunch 40, Marc Andreessen mentioned how you have to be crazy to be CEO of a company. He is right.
LIFE AS A CEO
Waking up to bad news, going to bed to bad news… knowing that any semblance of good news in between will at any given moment pause and give way for bad news is no way to live life. Mind you, I am the eternal optimist and find good news in everything and actually get pumped up for the challenges and obstacles that we face every day.
I actually believe that I can talk my way out of things, mainly because I am honest and as naive as this sounds: the truth will always cover your ass.
That’s right: if you lie, then you need to ration your words. If you speak the truth, eventually you win others over. Of course, that outlook makes some small-minded folk dislike you, but who cares.
52 HOURS OF DOWNTIME
This Saturday at 4am, our sites went offline. Recently, I hired a part-time system administration person to monitor our sites’ activities. Since that decision, we were up 100% of the time… until Saturday. We came back up sometime this morning at around 11am. That’s right, from Saturday 4am to Monday 11am, that is a 56 hours of downtime… simply unacceptable.
Over a month (720 hours), that 56 hour run translated to a downtime of 7%. You oftentimes see companies brag about 99.9% uptime. What does that translate to? Well, over a month, to be up 99.9% of the time, that means you can only be down 7 hours per month. That’s not a lot of time. Apparently, a lot of sites - big and small - are down. Numerous reports outline downtime of social networks: Bebo is tops, or worst… depending on how you see it.
YET SOMEHOW, OUR 3RD BEST DAY EVER
What’s interesting about our down time was that Saturday - when we were down for 20 hours out of 24 - was our third best day ever. Did we have massive traffic on those first four hours from midnight to 4am on Saturday?
Nope. We do 99% of our video streams (HipMojo.com is one blog out of 15 or so, and our sister site is the WatchMojo.com video content producer and syndicator) on our syndication network. I always brag that our success is independent and agnostic of any one site, and apparently, that includes our own, go figure.
Maybe that is why I wasn’t cursing and throwing a fit.
Maybe it’s because I will be a father in three months and I have a different perspective.
Maybe it’s because I don’t have outside investors to worry about so I’m not on the hot seat to make up excuses and can look at the matter objectively to avoid it from repeating.
Maybe it’s because I simply understand and accept that it’s out of my hands.
Maybe it’s because before and after that happened, I was busy resolving an administrative headache…
At 11am: both were fixed. This too shall pass, a wise man once said.
Or, maybe it’s because when so many things are going right and all signals are going in the right direction, you can’t be greedy and have to take the bad with the good.
DUDE, I INVENTED… NOTHING
I’m no techie. I get tech. But I don’t pretend that I was “taking apart computers at 5″ or building “cell phones out of legos at 11″. I never was too much into tech to be quite frank. When I was 7, I hated computer class. Anyway, connecting all of these seemingly random thoughts, I realize the time is nigh to bring on a full-time techie. I am really fortunate to have 3 really talented tech guys working with me, but they’re part time guys… I wish I could afford them full-time and maybe the day I raise some serious money I will be able to do that… but right now, I cannot afford those guys full time.
DISTRIBUTION OVER DESTINATION? AMEN
Mind you, if this weekend proved anything, it’s that our site is somewhat secondary to the gameplan relative to our syndication network. As the company CEO, that essentially validates the rationale behind launching the network… but it also makes me think about realizing one’s weaknesses as a CEO.
WHAT MAKES A GOOD CEO?
Being the CEO of a company is essentially being willing to take a barrage of body blows, interrupted once in a while by a shot to the head. That’s why I was nodding my head in agreement when Netscape founder Andreessen was describing the masochist nature of CEOs. I don’t know what is more daunting: CEO or founder?
Both have their wonderful surprises, as both the founder and CEO, I’m too numb after this weekend to even really tell which one is worst, or better…
RECOGNIZE YOUR STRENGTHS
When I think of what made me uniquely qualified to launch WatchMojo.com, I sum it up into three main pillers:
1- good storyteller: can package content well;
2- good salesmen: can pitch why we do what we do to all interested parties, be it hosts, advertisers or would-be investors;
3- web-savvy: experience in search, online publishing… good mix for the nuances of web video.
There are probably a million people that are better at me at every single one of those things, but I would not be able to find anyone that is as good as those three things as I am all at once (if that sentence isn’t a bastion of modesty I don’t know what it - yes, that’s sarcasm).
After a couple of years of managing this company and having been involved in successful startups working alongside successful entrepreneurs (and studying the DNA of many other management types), here are a few random observations:
DIFFERENCE BETWEEN FOUNDER, CEO AND EXECUTIVES
a) If you are only good at one thing, you can start a company but you can’t be a CEO. Why? Your vision will be critical to starting something and take it from concept to reality, but you are kidding yourself if you think you can weave through the intricacies of doing it all.
b) If you are good at a few things, but not necessarily outstanding at any one thing, then you can both start a company and run it as its CEO.
c) If you are good at a few things, but lack the patience to master any single one of them or don’t want to hone your skills in one of those thing to specialize in, then you will eventually need to step aside and make room for another CEO or at least bring on a COO or additional VPs and employees to address weaknesses or under-developed areas.
Anyway, now that the company’s been around for 2 years, I realize I spend a lot of time doing things that do not touch on 1, 2 or 3 above.
Sure, I still devise content strategy, recruit talent, advertisers and publishers and always try to be one step ahead of where the online video space is going… but I am also spending way too much time on areas that I could care less about or am not best suited at:
- Do I really want to spend hours at the bank? Nope.
- Do I really want to wrap my head around the nuances of a server? Nope.
- What about understanding how corporate taxes work? Nope.
I guess what this weekend made me realize, is that I started a business for a very few simple reasons… but two years into it, I need to make some decisions in order to minimize the time I spend doing some things I don’t - or shouldn’t - be spending time doing.
What are those decisions. Stick around. You’ll find out soon enough.
In 2005 Yahoo! released its search API, the developer community went crazy… I assembled a couple of programmers and built a vertical search engine called MetaMojo.com. We subsequently moved away from Yahoo!’s API and built a Nutch-based crawler instead because Yahoo! took one step forward but two step back.
Today Yahoo! Search goes open… This basically allows publishers to tweak Yahoo!’s search, though they cannot tweak results. I think this will be noise today, gone tomorrow. Yahoo! should have really opened up its search platform then, fully. It didn’t. My frustrations working with Yahoo! then were emblematic of everything that is being written about Yahoo! today.
Not a day goes by where Yahoo! does not seem to launch something new, yet old. Yahoo! is now cornered into a corner like a dangerous, wounded animal. Its moves are erratic, it will attempt everything to fend off its pursuers… get out of its way, it might fall under its own weight.
Note: Long YHOO stock.
Well, it’s happening. The cycle continues. As more and more people are receiving pink slips, the evolution of business cycles enters a new phase: a bunch of YHOO staffers with more experience than they know what to do are leaving. A very small few will launch new businesses, some will enter established corporations, a handful will join startup companies on the rise.
When I started Mojo Supreme, it was because I wanted to hire people and build something big. I no longer have to think about it, I can actually do it. So, if you have left YHOO or simply looking for a gig, check out what we do and drop me a line.
Check out our flagship property at WatchMojo.com but more importantly, look at all of the things we’ve got brewing under the hood in each nook and cranny of the Mojo Supreme company. As I said, we’re looking for a few good men and women. So if you are looking for a new challenge, drop me a line at ash@mojosupreme.com.
For the longest time, I’ve been hinting at private equity firms to give me a call so we can rescue Yahoo! That might happen, it might not. But to pull that off, you need a good $40B or so. With Yahoo! at $25B - and reporting earnings as we speak - it might happen.
But today, an easier target. No, I’m not talking about CNET - though I’d love to manage CNET and whip it into shape, too. CNET is in fact facing a hostile takeover from Jana Partners, who has built up a 20% stake in the company.
I’m talking about About.com, the company founded by Scott Kurnit, first sold to Primedia for $690M, then unloaded to the New York Times for $410M in 2005.
Just this past Sunday, I mentioned that I was surprised at how little NYT had invested in developing the videos on About.com. I mentioned that with much lesser resources, we had built a video library twice the size of About.com.
Anyway, Alley Insider is now reporting that NYT wants to sell About.com :
It’s on track to do about $100 million in revenue for 2007, and perhaps $30 million in operating profit, up from $44 million and $11.7 million in 2005 (those numbers include results from recent acquisitions like ConsumerSearch–$33 million purchase price–and UCompareHealthCare.com, $2.3 million). At a 15x Ebitda multiple, About could fetch $450 million. Bump that up to 20x, and it looks a little better: $600 million.
I think About.com will have a hard time finding a buyer because big buyers won’t know what to do with it. With so much focus on social media and networking, an old school Web 1.0 company such as About.com won’t be able to command $500M from many obvious buyers because such companies would rather spend $500M on more high growth opportunities - basic risk and return.
So devoid of such upside, here’s my two not-so-subtle suggestion:
- Lend me $500M.
- We’ll buy About.com for $500M
- We’ll leverage our expertise and library at WatchMojo.com and invest some of that $30M in profits in developing About.com in a video content powerhouse to match its text content strength.
- We’ll integrate our MetaMojo.com vertical search technology to better develop and profit from niche vertical opportunities.
- We’ll let About.com’s columnists use the BloggerMojo.com blog network to publish timely pieces that drive traffic back to the millions of pages deep within About.com.
- We’ll use the StreetMojo.com application and create mini comminities matching users with marketers (b2c) and users with users (c2c).
Overnight - or in 1 quarter - About.com goes from a really useful but stagnant old, new media company, to a rapidly growing company with considerable exposure to both social media and video.
Adding our existing video content alone on About.com’s thousand of SEO-optimized pages alone would reap considerable strategic value. But with video advertising set to cross $1B in 2008 - and cross $7B in 2012 in the US alone - I am pretty sure that I can make About.com be a $10B market cap company in 5 years (7x growth in video market alone in 4 years).
Let’s face it, About.com can attempt to build up video alone etc., but within About.com, that will be hard. With About.com being a part of NYT, it’s impossible.
Something tells me that making a run at CNET is counter-productive. They don’t seem to be a willing, motivated seller. But NYT Company? I think they’d sell that puppy to me in a heartbeat.
Now all I need is a banker. A private banker with $500,000,000.00. Hmm. Where can I find that?
Any takers?
Related:
IAC separated its vast arsenal of assets into five companies.
Yahoo! is under pressure to streamline its portfolio of assets, too.
The need for clarity and focus is not limited to new media companies only. Venerable 121-year old retail empire Sears is planning to give a lot more autonomy to its various units, as well.
Sears Holdings Corporation, the publicly traded parent of Kmart and Sears, Roebuck and Co., is the nation’s fourth largest broadline retailer with over $50 billion in annual revenues and approximately 3,800 full-line and specialty retail stores in the United States and Canada.
Maybe it’s time to spin off StreetMojo.com, MetaMojo.com from WatchMojo.com?
The financial crunch might force a bunch of mergers and acquisitions, but after a heady period of consolidation in numerous other industries, it is possible that we might see some divestments, too.
Last week, Microsoft’s Don Dodge listed 50+ video search companies. It’s a good overview of the market, which has gotten quite crowded. I am not sure who will win the space, not even sure if one player will emerge victorious, given how fragmented the Web has gotten. Mind you, if one company does win, the odds on favorite are Google/YouTube, owner of the world’s best search technology, the world’s largest archive of videos and the world’s most valuable ad network.
While it’s not exactly a core focus of our company, we have a meta video search product, too. I figured it would be a nice addition to our product line given our core focus in video production and syndication and other search applications.
Anyway, check out the results for Vladimir Putin, for example, named Time’s Man of the Year today. The results are pretty good, no?
“If you saw this one coming, give yourself a very large prize.”
Tech Crunch’s Duncan Riley
I can probably find it in an email, a presentation… though it was probably verbal… but since 2005 when we built the first product in the Mojo Supreme assortment of goodies, the MetaMojo.com search engine, I figured it was a matter of time before Google would do two things:
- personalization
- socialization
They did the personalization part in 2006 when they launched Coop. I covered it plenty here.
They did the second part just now: Google is running an experiment that can “influence [the] search experience by adding, moving, and removing search results.”
Think Google meets Digg.
This was one of the many bells and whistles we looked at adding, but ultimately didn’t because the strain on our index’s database would slow down the speed of the product, which is more important frankly initially than the ability for users to vote for results on the fly (we can change the order on the back end, however, seamlessly).
There’s a reason why we devote (and have devoted since January 2006 when I left my old company) 99% of our resources on WatchMojo.com and not MetaMojo.com. MetaMojo.com has two products: a vertical best of breed search engine, and a video meta search. The video meta search is actually getting more and more popular… But the vertical search’s benefits are over time easily duplicated by someone like Google, and we knew that.
The reason is that as the world’s largest computer with the largest distribution in the world and the best monetization engine in the world (see a trend), Google can overnight add features that would take years and millions in capital to scale by a startup.
For the record, I still believe in vertical search, niche players etc., but search is NOT really in the first inning. In some ways, it is, yes… but I do not see anyone knocking off Google (not saying anything new there, admittedly, as they have 66% of search ad revenue and query market share).
Of course, I think mass market search players like Google will launch things and startups can execute it far better, but unlike the Coop product that is easy for startups to do (if you knew that our total budget for MetaMojo.com was since 2005 you’d think we were magicians and could turn water into wine), what they did today is a bit more tricky (the pressure on their database of results, which is already in the billions of sites, is staggering)… but for Google - the world’s largest and strongest online computer - it’s a simple add-on.
Technologically notwithstanding, I am more surprised that they did this, because Google has long been all about the algorithm, and by allowing mortal men (and women) to change the order of results, then they are taking a new direction.
Of course, with all major companies, the individual first steps they take is somewhat moot, it’s the follow up and execution that is key…
Jack Welch argued that you should compete in a market so long as you could be #1 or #2 in that market.
Apparently, a lot of current VCs are students of Jack Welch. YouTube is the undisputed king of online video, then the market is fragmented:
I’ll admit this much, I am probably very diplomatic because most of these sites are distribution partners of our company WatchMojo.com, but by the same token, that’s never stopped me from ripping our largest partner YouTube, either.
So, first, some context:
- first Veoh raised $40M
- then, Metacafe raised $30M
- today, it’s Daily Motion, who raised a whopping $34M
According to WSJ, via PaidContent.org (who is less diplomatic than we are, calling the post “The Race of Also-Rans: French Video Sharing Site Dailymotion Raises $34 Million; More To Come”):
If Veoh can raise $25 million, and Metacafe can up the stake to $30 million, then why not Dailymotion? The France-based online video sharing site has raised $34 million in its second round of funding. The round was led by Advent Venture Partners of London and AGF Private Equity of Paris, a division of Allianz AG. The site has raised about $9.5 million in October last year from Atlas Venture and Partech International.
Dailymotion, which is based in Paris and was launched in 2005, has grown rapidly to reach some 37 million visitors a month, the story says. It was recently fined a modest $32K by a court in Paris for unlawfully carrying a clip from a 2005 movie by a French director. With this big round, the copyright infringement stakes are going to get higher, for sure. Last month Dailymotion rolled out Audible Magic copyright detection software on its site, which catches clips after they have been uploaded.
Of course, GE operated in mature businesses, well, mature by the web’s standards. So online, the argument could be extended to competing in a space so long as you can be Top 5.
In fact, that makes sense, if you think of search, where Google, Yahoo!, MSN, Ask.com and AOL account for 99% of the market share and all boast multi-billion dollar businesses.
In fact, 99% of the total market capitalization of the search engine industry is
= Google’s $150B
+ Yahoo!’s $17.5B
+ MSN’s $10B
+ Ask.com’s $3.15B
+ AOL’s $3.15B
= $183.8B.
For our analysis of their respective search business’ worth, click here and scroll down to Part II. This link actually outlines the value of the video advertising business in 2011, and the parallel between search and video is eerie.
Today, the search industry accounts for 40% of all online advertising, or $10B worldwide per year. By 2011, the more aggressive projections by Understanding & Solutions call for video to generate a $10B market (more dovish projections by eMarketer call for a $4.3B market, but we digress).
If you connect the dots, the potential for the Top 5 video players can represent as lucrative of a market in video in 4 short years as it does in search today. Mind you, this is a massive leap of faith. Also, one problem is that there is no guarantee that the Top 5 “value-holders” will all be video file sharing sites.
Yesterday, for example, News Corp. and NBC finally baptized NewCo./Newsite Hulu, and that already boasts a $1B valuation according to provate equity bankers Providence. Then, like we’ve outlined previously, come the numerous video search players who are vying for a seat at the table of Top 5…
Translation: it’s not my partner status as executive producer/founder of content producer WatchMojo.com that makes me diplomatic, I actually think that some of the VC investments in late round stages makes sense because a lot of VCs want exposure to this space. Where I tend to respectfully disagree with the “smart money” is that most of the content that currently gets played on YouTube, Veoh, Revver, Metacafe, DailyMotion and company is not what advertisers want, meaning that a lot of the use of funds will go to subsidizing hosting and bandwidth.
Of course, other uses of funds include legal fees. Make no doubt about it. As ridiculous as Viacom looked today in the Web Junk snafu, expect more legal muscles to be flexed… Another use of funds, obviously, is building out sales teams. Right now, most of these companies don’t have the sales infrastructure required to capitalize on the booming market, which takes us to the most likely scenario surrounding many of these “also-rans” (to quote Rafat, of course).
I know what you’re thinking, looking at the Table above: “but Veoh, Metacafe and Daily Motion” are not in the Top 5″. True. But considering YouTube was acquired by Google, MySpace was taken off the market by News Corp., and then Google Videos, Yahoo! Videos and MSN Videos being corporate giants, in VCs eyes, they are Top 5 sites.
A lot of these companies will eventually get bought out… either for traffic, or technology, or simply out of sheer paranoia.
So, are VCs dumb or smart to back them, it depends… anyway, we’re seeing late stage VC investing in file sharing, where will we see Series A rounds?
Yesterday Joost co-founder Niklas Zennstrom made the announcement that Joost had 1M users. A lot of writers jumped on it to discern whether he meant 1M downloads, 1M users in all since launch or 1M concurrent users.
I have no clue which one he meant. Also, I wish Joost a lot of success, sure, WatchMojo.com is a content provider and all to them, but I wish them well because anything that gets more consumers viewing online video online is a good thing, independent of whether WatchMojo.com’s content happens to be on deck.
What’s interesting about Joost, or Babelgum, or Vuze, is that it will boil down to content. When I read Caroline McCarthy’s take on Zennstrom’s announcement, she too referred to the big C: “The catch is that one million beta testers absolutely doesn’t translate to one million active beta testers. I’ve been playing with Joost since the early days, and I tend to agree with much of the feedback I’ve heard about the start-up: amazing interface, effective peer-to-peer architecture, but a noticeable lack of worthwhile content.”
Caroline, may I sheepishly suggest the WatchMojo.com channel? Anyway, Joost’s 1M mark is impressive regardless of what Zennstrom meant, but it is true that for a company with $45M raised from outside investors (in addition to whatever Zennstrom and fellow Kazaa and Skype co-founder Janu Friis invested, expectations are high.
Which begs the question, are expectations reasonably high? How big can the video market get?
PART I: WHAT WILL BE THE TOTAL MARKET CAPITALIZATION OF VIDEO MARKET IN 2011?
We’ve seen estimates for video advertising surge rapidly. I’ve been keeping track of these, and here they are:
An estimate of the online video ad market for 2009 - set in 2004: $657 million | Source.
An estimate of the online video ad market for 2009 - set in 2005: $1.5 billion | Source.
An estimate of the online video ad market for 2010 - set in 2006: $2.3 billion | Source.
An estimate of the online video ad market for 2010 - set in late 2006: $3 billion | Source.
An estimate of the online video ad market for 2011 - set in 2007: $10 billion | Source.
$10B? That is more than double the highest estimate I had seen up to that one. But $10B is an interesting figure, not because it’s round and 11 digits long, but because that is how much Google generated in revenues in all of 2006 (with a 50%+ market share grip on the search market, mind you).
We’ll examine this $10B figure in Part III.
But, if Google generated $10B in advertising revenue and commanded a $150B market cap to itself, then could be the video advertising - potentially poised to make as much as Google did in 2006 - be worth $150B by 2011?
Of course, the major factor to that - in addition to the accuracy of the $10B figure - is whether or not Web video companies will command the same multiples as do search today?
And… that’s the problem facing TV companies, the projected market value has little to do with revenue, but rather, multiples on revenues. TV is today a $75B ad market, even by 2011, the video ad market on the Web will be a fraction, meaning that TV companies don’t have a reason to get online…
PART II: WHAT IS THE TOTAL MARKET CAPITALIZATION OF SEARCH ENGINE MARKET TODAY?
MSFT’s Don Dodge had argued that 1% share in search translates to $1B. I disagreed to some extent but largely agree that even 1% of market share is quite lucrative… I ran some more numbers are estimated that:
- Yahoo!’s search business is worth half of its market cap, so roughly $17.5B, something I analysed in “Can Google Buy Yahoo!?” - Analysis.
- MSN.com/Live.com - portal and search - was worth some $28.75B, the search component should be at most 1/3 of that, or $10B - Analysis.
- Ask.com was worth $3.15B - Analysis.
- Time Warner’s total market cap is $75B, Google invested $1B for 5% of AOL for an implicit valuation of $20B. Bear in mind that depending on which source you use, AOL’s search market share is less or equal to Ask.com. Let’s just assume for simplicity sake that AOL’s search business is worth exactly what Ask.com’s search business is worth, so $3.15B.
It should be noted that Google, Yahoo!, MSN, Ask.com and Time Warner’s AOL make up about 99% of the market share in search. In other words:
99% of the total market capitalization of the search engine industry is
= Google’s $150B
+ Yahoo!’s $17.5B
+ MSN’s $10B
+ Ask.com’s $3.15B
+ AOL’s $3.15B
= $183.8B.
Toss in all of the other wannabe’s (including our own MetaMojo.com) who account less than 1% market share for an additional $1.2B (somewhat fair since Dodge argued that 1% is equal to $1B) and then the entire market capitalization of the search market is $185B.
That’s a big number, indeed.
That’s not the volume of sales in search, but the market cap. Search gets 40% of the online ad pie, which in 2006 was $17B for the US, so $6.8B in the US.
The global Web ad market was set at $25B, so 32% of all (over time this will grow, Google is doing just less than 50% right now). So the total global search revenue stream was $10B.
In other words, in search: a cumulative, global $10B revenue stream generated a $185B market cap ecosystem, or roughly 18.5 times sales.
PART III: LESSONS FROM SEARCH FOR VIDEO MARKETWe know that search currently accounts for 40% of the total online advertising market, with video growing.
To put it mildly, video is far more nascent than search:
Search is like the mature, stable, “income” component of online ads, with video being the high-growth, volatile and uncertain revenue stream. Just look at some of the estimates and you see that it’s all over the place, as listed above.
I’ve already stated that I’m not sure how valid that last $10B forecast is, even though as a video producer ’tis music to my ears. But, of course, if it is true, then by 2011 the online video video will have grown over 2,300% from eMarketer’s 2006 figure of $410M. Admittedly, I’m mixing figures here, taking 2006 stats from eMarketer and 2011 figures from U&S, but who believes any of these stats anyway, the point is, if you were to make the case, you could argue that video advertising is about to explode much the same way that Google’s revenues did, leaving MSFT and YHOO’s advertising-based revenue in the dust:
Here’s one visual, taken from SeattlePI:
Here’s another, taken from Valleywag:
I personally doubt some of the numbers that are bandied about, especially over a 4-year period. But, if anyone would have put forth the following numbers, which represent Google’s actual, historical revenue growth, four years ago and said this is what one company - let alone a segment of the fastest growing ad market - would do, I’d be pretty cynical too.
Google had $439M in ad sales in 2002 and $10B in 2006, for a 4-year return of 2,300%.
So, if Google generated $10B in advertising revenue and commanded a $150B market cap to itself, then could be the video advertising - potentially poised to make as much as Google did in 2006 - be worth $150B by 2011?
Considering the market leader YouTube last year fetched $1.65B on $15M in revenues, maybe that deal (which we re-examined 9 months later here) is starting to look increasingly wise and over time might end up on the Top 10 M&A Acquisitions of All Time?
CONCLUSION: ROLE AND PLACE OF CONTENT
In search, the winner was Google because they bundled a good technology with an embedded advertising product. The problem is that Google’s maniacal success will make it harder for any one company to becoming all-encompassing in advertising as Google did. That’s the Google envy phenomena I refer to that seems to create obstacles in terms of standardization: everyone wants their platform to prevail.
So ultimately, I think that to echo the comments pertaining to Joost above, the value we’re placing on content is being underestimated. The natural conclusion is for the high quality content from TV to come online, but it’s not like TV companies will push that onto the Web, for there are technology issues and economically there is little incentive: TV is a far greater revenue stream than online will ever be, and the TV companies will never command the multiples of their online counterparts.
So while the natural conclusion or prevailing wisdom is that TV broadcasters etc. will be all over this growth, I just do not see this happening because as audiences continue to migrate online, so will ad dollars, but the ad dollars will be smaller than what TV is accustomed to now.
If you doubt my conclusion, ask yourself why and how the offline media giants failed to be the leaders online then during the Web’s first 10 years. It was not in their short term interest, and short term revenue and profitablity targets will always trump long term ones when you have to please fickle and near-sighted investors.
Another reason, is that they were slow and reactive. One more, frankly, is that digital revenues are rarely really incremental for traditional media companies, they are usually cannibalistic and take away from their core businesses.
That is why you have to feel bad for TV executives, who look at what happened to print companies (ie. even the companies that generate more revenue command much smaller multiples so they are, in fact, worth less) and understand the angst and envy they have for online content producers and technology platforms who are looking at all of this opportunity and wreaking havoc as the tug of war between old and new media continues to create more casualties.
I’m not sure if Jesus had a computer, high-speed Internet access and time on his hands to kill, so let me ask you this instead. In fact, Jeremy Liew today talks about vertical sites, behavior targeting and synthetic channels so I might as well ask what would Jeremy do…
Anyway, we’re really close to relaunching our flagship WatchMojo.com web video site, and I’m flirting with one of two strategies.
1 - Status Quo
Mojo Supreme’s motif is the “context is king” mantra. When we launched, Mojo Supreme consisted of a vertical search engine (still does) MetaMojo.com. It offered best-of-breed results across a number of categories, such as film, music, video games, health, travel etc. Each category was then reinforced with a media property, usually a blog. All blogs are listed here.
So the music search engine would be showcased on SoundMojo.com, for example. While today SoundMojo.com would redirect to WatchMojo.com/Music/Blog, initially it housed the blog as a separate domain. We made the change four months after launching to simply the management of the sites.
To this day, the blogs each have a shortcut URL but get redirected under the WatchMojo.com umbrella.
While we maintained this strategy with the blogs (hence why HipMojo.com redirects you to WatchMojo.com/Web/Blog), all of the videos we produced were published under the WatchMojo.com “brand”. It was, after all, watch Mojo.
2 - Micro-Publishing
But as maintained our strategy and a) aggregated, b) indexed and c) produced content, we developed fairly deep verticals.
In case you are wondering, we produce video, aggregate top 10s and contests, index text content via our search engine and videos from around the Web. It was pretty maniacal when we set out to do it, but it really strengthens our base.
So, here’s my dilemma:
As we get close to relaunching, I wonder, maybe we should have the SoundMojo.com shortcut URL take you to the vertical category’s main page; the page that aggregates video, blog entries, Top 10 lists, contests and showcases the search engine.
In other words, split up WatchMojo.com into vertical microsites. With 4,000 videos, 10,000 blog entries, 7,500 contests, etc., does it still make sense to have one portal. Or should we break up into verticals? Technically it’s all the same and this is a question of semantics, or domain forwarding, but it does make a difference.
In other words, when you type any of the shortcut URLs, should you go to
a) the blog page or
b) the vertical home that leads with a video but also has blog entries, Top 10 lists, contests etc.?
Any thoughts? Can you tell I can’t wait to relaunch…
PLAY
