Insider Chatter by Donna Bogatin

If the MySpace rasion d’etre is to promote the unfettered creation of user-generated content, wouldn’t advertisers be missing out on the real MySpace experience if they advertise against “non” MySpace content. Moreover, do MySpace friends even visit the “non” MySpace protected areas in MySpace?, I asked John Trimble, SVP Branded Sales, FOX Interactive Media, in the Fall of 2006. Trimble made a “protected area” brand sales pitch at an IAB Summit, asserting that MySpace is where the “sizzle” is and putting the “best” MySpace face forward, a sanitized one.

Fifteen months later, as MySpace plows ahead with its safe, “non” MySpace “mainstream,” content agenda, The New York Times now also wonders if News corp.’s crossover dreams are compatible with the desires of Tom Anderson’s 221,416,999 friends: 

The original content may draw advertisers who are wary of placing a marketing message next to a messy profile page, but it is unclear whether the users who make MySpace the most-viewed Web site in America will want to watch TV episodes and chat with friends on the same site.

The MySpace nemesis, Facebook, believes it has accomplished an integrated social network brand advertising coup, by using Facebook users, often unbeknownst to the users themselves, as smiling product spokespeople in high-quality brand ads on users’ “friends’” Facebook profiles.

What about Multiply.com, a site launched almost four years ago, which “effectively defined the new field of social communications,” according to founder and CEO Peter Pezaris?

Multiply.com obtained a $16.6 million Series B round of venture capital financing last fall and I chatted with Pezaris and David Scott Carlick, the Vantage Point Venture Partners Managing Director which joined the Multipy board as part of the firm’s investment.

Pezaris and company continue to put forth a strong value proposition for users, but what about for high quality brand advertisers that are essential for the success of Multiply’s traditional media monetization model? 

Carlick told me in September he looks to Multiply–and all the social neworking players–to further educate brand advertisers about the under utilized power of reaching consumers in new, peer-to-peer environments where the users create all the content. Multiply sported Google AdSense, but Carlick derided it as “backfill” which does not enhance user experience. Both Carlick and Pezaris indicated to me they envisage a Multiply monetized by high quality brand advertisers seeking to directly engage with real people as they interact with friends and family in their own personal online spaces.

MySpace and Facebook are apparently succeeding in educating brands about the real power of real people.  

Where does Multiply stand four months later on its drive for higher CPM, brand advertising? Pezaris’ own Multiply profile page sports low CPM style banner ads for the likes of ringtones and domain name sales AND “backfill” Google AdSense.

Pezaris is now touting “numerous changes to Multiply with a focus on site optimization, such as an Ajax based interface for browsing therough photos within an album.”

Pezaris is particularly proud of his focus on the Multiply user experience, come what may. The Multiply CEO told me:

One side effect of this change is that we are knowingly deflating our page view numbers and ratings and rankings. Unlike other social networking and media sites that are primarily focused on numbers for the sake of a quick sell out, we are in this for the long haul and user experience continues to be our number one product development priority!

Which social networking sites are looking for a “quick sell out”? MySpace is long sold and Facebook is not for sale, we hear time and time again. BUT, what about Multiply.com, really?

What is the real end game time table for Pezaris and Multiply investors? How/where/when does the real money kick-in for the Multiply.com business model? Multiply does not have the levels of traffic or brand recognition that MySpace and Facebook enjoy.

How long will investors continue to fund Multiply.com? Will Multiply soon be looking for a “quick” way out?

ALSO: Multiply.com Raises Consumer Media Stakes AND $16.6 million VC: INTERVIEW and Lending Club $108 billion Market Opp ex Facebook: Goodbye Banks! EXCLUSIVE INTERVIEW

PLUS: Scrabulous At Risk? Zynga $10 million VC Game: Facebook Roulette and AP On LinkedIn: Social Networking Gold Mine at $5 per User? and Why Zynga, NOT Scrabulous, Has a Lucky Facebook Charm and Facebook Davos PR Blitz: Beware Scoble Hype, Users Still at BIG Risk

CONTACT DONNA BOGATIN

News Years Resolution? Grow your startup into a billion dollar business, NO business model required! NO problem, in Jason Calacanis’ entrepreneurial rule book, as long as you are as capital connected as him!

Calacanis has a $20 million capital kitty in the VC bank for his latest venture, Mahalo, undoubetdly much more than Twitter is working with from Union Square Ventures. So, when will Calacanis see his first Mahalo billion? After all, Calacanis guarantees billions for Twitter within 12-24 months.

At Mahalo, though, Calacanis is counting on his VC money to give him a five year ride, and he is getting his money’s worth: Claim to the title of “the world’s first human-powered search engine” costs a pretty penny. The expense side of the startup equation is ignored, however, in Calacanis’ feel-good, throw out your business model on the way to the startup lottery window world.

Mahalo nevertheless pays dearly in human capital costs costs for its no-algorithms-here branding. Twitter’s free-to-Twitterers largesse is also costing its investors dearly, as Twitter has acknowledged:

We’ve negotiated for good bulk rates but we still pay for this SMS traffic just like we pay for storage, hosting..

Twitter appears nevertheless to be firmly in accord with Calacanis’ exhortation to “get to tens of millions of users and forget about money”:

The idea has been floated that Twitter somehow earns money from your texting while in fact the opposite is true.

WHEW! What a relief? If Calacanis’ wild and crazy musings about Twitter’s growth trajectory were actually to come to pass, what an expensive Tweet Twitter and company would be in!

Calacanis’s throwing startup caution to the wind advice is eerily similar to Web 1.0 style eyeball snatching, VC busting, grow traffic, not profitable sales, “business models.”

Startups beware: Calcanis’ billions can be had for the “critical mass” taking entrepreneurial “strategy” is the venture equivalent of playing the lottery. As millions know, though, there is NO “smart” lottery money.

MORE: Edgeio Web 2.0 Bomb: Michael TechCrunch Arrington Cheers $5 million Startup Loss and Web 2.0 Startups: Will Geek Chumby ‘Fade Away’ in 2008? and Loic Le Meur Seesmic Formula? NO (Big) Idea, NO (Marketing) Plan, NO (Revenue) Model 

PLUS: Startups: Who Needs Business Plans? Draper Fisher Jurvetson, Mayfield, Sequoia… and Want Sequoia Funding? Submit a Business Plan: Here’s How AND Kleiner Perkins Venture Capital: Business Plans Please

WANT TO SUBMIT YOUR BUSINESS PLAN?: Draper Fisher Jurvetson ~ Mayfield Fund  ~ Sequoia Capital ~ Kleiner Perkins Caufield & Byers

NEED HELP IN DEVELOPING A BUSINESS PLAN? CONTACT DONNA BOGATIN

” Advertising will pay the way” on the Internet, Viacom and CBS Chairman Sumner Redstone reconfirmed today at a New York City conference. At the same time, the New York Times attested to the power of ad-supported online media, at another NYC conference.

Nevertheless, NY Times $10 million Free News Bet NOT a Sure Thing I headlined when the old gray lady knocked down its pay wall. The GM of NYTimes.com suggested same this morning, during an Ad-Tech panel on “Publishing in the Digital Age, How Companies Are Extending Their Reach.”

Vivian Schiller began her presentation by sharing just how much the venerable “dead tree media” has extended its reach online since it dropped its fee plans for featured opinion columnists and the archives: Search referral traffic has increased 133%, Schiller said.

Nevertheless, “it is too early to declare victory,” Schiller advised. In other words, the content must be free game–at the cost of $10 million in yearly subscription revenues–is NOT a slam dunk.

Schiller remains bullish, however. Under the TimesSelect regime (which represented about 10% of content), direct navigation represented approximately 55% of NYTimes.com traffic, search referrals about 45%. Since opening up “opinion and archives,” search referral traffic has “tripled, quadrupled,” Schiller said.

For the NYTimes.com, online subscriptions and direct navigation is akin to “appointment viewing”; Share of such traffic has decreased, as search referral traffic increased.

Schiller extolled the New York Times brand and the quality of audience it delivers to its advertisers. During the Q & A, I discussed how overall audience quality is impacted by the new influx of search referred traffic.

I asked Schiller:

1) As search referred traffic outpaces direct navigation, how will advertisers react?

2) Are CPMs lower for search referred traffic versus direct navigation?

3) How does NYTimes.com deal with fickle search referred visitors who sometimes don’t even finish the clicked-on story, let alone browse other areas of the site?

NYTimes.com advertisers are pleased with the greater access to a higher number of monthly uniques representing new, diverse demographics, Schiller indicated. Moreover, CPMs for advertising at NYTimes.com are not based on source of visitor origination, so CPM dilution is not a concern, according to Schiller.

Schiller acknowledged that average, overall time spent at NYTImes.com will decrease as the percentage of search referred traffic grows. The site is subject to the typical 80-20 rule, whereby a small number of loyal users drive a large portion of revenues, Schiller indicated.

BUT, if it is too early for the New York Times to “declare victory” on the “opening up” of NYTimes.com, it may also be premature for the company to conclude that there will no negative impact on CPMs going forward. After all, while the New York Times may not break out traffic by source for ad pricing, advertisers may very well judge the overall audience quality inferior at some point, and subsequently put downward pricing pressure on NYTimes.com CPMs.

In analyzing the New York Time’s future CPM prospects when it announced its farewell to TimesSelect subscriptions, I underscored that as page view increases will be derived from fleeting search engine and link-fueled visitors, it is unlikely that NYTimes.com would be able to continue to command high CPMS as it has been accustomed to with its dedicated readership.

Rupert Murdoch did a silmilar analysis in reporting to Wall Street yesterday on the future prospects for WSJ.com:

The wsj.com, making it free, we are examining the possibilities of doing that. There are a lot of pros and cons. We passed 1 million people now who are paying for it, and getting very, very high cost per thousand for advertising.

On the other hand, if that was to jump to 10 million or 20 million people around the world, it could be a wonderful thing for the brand. We would be selling the ads at a lower cost per thousand but I think we’d be in front.

NYTimes.com has already bet that it will be in front.

MORE AD-TECH EXCLUSIVES: NBC STILL Playing YouTube Games with Google: Ad-Tech Report and IAB Blasts FTC: Cookie Police Threaten $20 billion Internet Ad Economy, Ad-Tech Report

PLUS: YES! Facebook IS Scarier Than Google! AND WSJ.com Beware: Digg Users Plot Paywall Hack

CONTACT DONNA BOGATIN

While the blogosphere rallies that Associated Press “doesn’t get” how the Internet “works,”  VeriSign is getting a renewed lesson in how business law works.

The AP reported that it filed a lawsuit last week in the U.S. District Court in New York against VeriSign’s Moreover Technologies, a company that “aggregates and redistributes news online, claiming it is making improper use of AP’s copyright-protected headlines, stories and photos.”

Tom Curley, AP CEO: Our organization “spends hundreds of milions of dollars annually to provide original coverage of vital breaking news that cannot be obtained elsewhere.” Nevertheless, Moreover is wantonly “freeriding on our newsgathering and our reporting of news from around the world.”

YOU GO, TOM! I have long noted: If ‘We the Media’ Poaches Content, Who Pays for News Production?

Last month, I underscored:Does Huffington Post Exploit Bloggers AND Mainstream Media?

At the end of the new media, “citizen journalism” day, who will pay to produce the news that everyone seeks to aggregate without paying for?

Moreover, will there continue to be original news to aggregate? After all, news may be a commodity, but valuable commodities cost dearly.

Whatever the legal merits of AP v. Moreover, or its outcome, it is a good thing that the who needs to pay for the content of others news aggregation “business model” is at risk.

ALSO EXCLUSIVE: NBC’s Defense Against YouTube IP Abuse? Carrot, NOT Stick: OMMA Report and CNET Founder Latest to Jump on Web 2.0 Aggregator Bandwagon: Political Base 

PLUS: Local Ad Sales War: Why Google is a Guaranteed Winner

CONTACT DONNA BOGATIN

Sling Media, the self-proclaimed “digtial lifestyle products” disruptor, is selling out to EchoStar, the third largest pay-TV provider in the U.S. and a DVR provider. WHY?

EchoStar, Charlie Ergen, CEO & co-founder: With today’s increasingly mobile lifestyle, EchoStar’s acquisition of Sling Media will allow us to offer innovative and convenient ways for our customers to enjoy their programming on more displays and more locations, including TV’s, computers and mobile phones, both inside and outside the home.

Sling Media, Blake Krikorian, CEO & co-founder: By combining strategies, resources and technologies with EchoStar, Sling Media will be able to rapidly expand our open multi-platform product offerings, not only for DiSH Network sunbscribers, but for digital media enthusiasts around the globe.

Last May, I heard the President of Sling Media, Jason Hirschhorn, tell advertisers and media companies at the IAB Video Forum that revenue generating “windows” are dying: TV, cable, DVD…because consumers are empowered to “watch TV virtually anywhere in the world.”

IS TIME-SHFITING, PLACE SHIFTING MEDIA CONSUMPTION CANNABILIZING TELEVISION? Gerorge Kliavkoff, NBC Universal’s Chief Digital Officer was asked yesterday at the OMMA Conference in New York City.

NO! Television viewership is what “drives everythng else,” Kliavkoff underscored:

Online drives incremental revenues for us. Viewers use the Web as a DVR to watch missed episodes. Our first-run business will be OK for a long-time.

TV 360 ad packages fuel integrated broadcast, online, mobile traction deals. TV 30s are what drives the economics of digital; We are growing our TV business and our digital business.

NBC is in an enviable position: When we sell $5 in TV ads, we charge $5.30, 25 cents for digital puls 5 cents for mobile.

What’s more, televison CPMs will rise, Kliavkoff asserted, as the “algorithms” improve:

We will have better targeting and advertisers will be happy to pay higher CPMs because they will get better ROI.

MORE OMMA REPORTS: OMMA Advertising Cat Fight? Google’s Media Chief Gets Defensive and NBC on Why Hulu.com IS a YouTube Killer and NBC’s Defense Against YouTube IP Abuse? Carrot, NOT Stick

ALSO: Facebook Sex Sting: Will Microsoft, Yahoo, Google Buy Into Scandal? and Yellow Pages Trash Talking: The SEO Dog in the Google Local Fight

CONTACT DONNA BOGATIN

Google is hailing its new Gadgets Ads product as reflecting the “componetization of the Web.” Federated Media’s CEO, however, prefers to view the Google rich media push as a boon for the “conversational marketing” brand of advertising he himself is marketing on his own behalf.  

John–Web 2.0, The Google Search–Battelle is determined to ride a third Internet wave, one he can claim to be truly of his own making, thanks to his own Federated Media. Three cheers for Conversational Marketing!

Despite competing head on with Google, Battelle enjoys Google briefings as one of Mountain View’s unofficial media ambassadors. Citing a Google Gadget Ads release today, Batttelle offers his signature retort “innaresting indeed.”

How so? Battelle deems Google to now be on the conversational marketing boat, which he is enthusiastically piloting:

I’m particularly pleased with the use of “conversations” in the release…it’s nice validation.

The official Google release at the Google press center does NOT include the word “conversations,” however. Communication, yes; Interaction, yes; Community, yes; Engagement, yes. Conversations? NO!

Battelle may have received a Google release stating Google Gadget Ads empowers advertisers to “have conversations with targeted users,” but the public Google release states that the new ad formula empowers advertisers to “interact with targeted users.”

While Battelle sees the dawn of a new profitable media day for his own Federated Media thanks to “conversations” between marketers and consumers, Google envisages “helping foster a sense of community between advertisers and users” to fuel future AdWords billions.

YAY! Not only are Web advertisers enabling the entire world to get content on the Internet for free, they are poised to become our best online conversational partners and the foundation of our Web communities.

Battelle, himself, is the literal embodiment of the end result of extreme conversational marketing: A boundry-less, branded continuum of editorializing-technology evangelizing-media philosophizing–industry analysing–conference producing–book selling–advertising supported writing–self-pitching–VC backed ad network operating–man about the Web town.

Battelle’s coverage of Google’s Gadget Ads “release” today illustrates, literally, the amalgam of conflicting interests that battelemedia.com encapsulates.

At his “personal” blog, battellemedia.com, Battelle lauds Google for “doing rich media ads, like the rest of us, but with a few new twists,” being sure to boast “at FM, we’ve also created some of these units,” their Webby “honored” RSS feed offering in particular, Battelle underscores.

Battelle is tickled that the Web’s leading ad platform is purportedly “endorsing” his Federated Marketing conversational marketing vision. He happily welcomed Google execs to the “Conversational Marketing Summit” Federated Media produced last week as well: Suzie Reider, YouTube ad exec and David Lawee, Google Marketing VP.

FM describes the Conversational Marketing confab as an “invitation-only event hosted by Federated Media Publishing and emceed by FM CEO and founder of the Web 2.0 Conference, John Battelle.”

In the words of Battelle himself, “innaresting” that he shrewdly maneuvered a paid “conversation” to make money by promoting the raison d’etre of his own money making business!

Battlle apparently also uses his own Federated Media to serve a WebEx sponsored ad at his battellemedia.com for his own (paid?) “conversation” about the “conversational marketing” pioneered by Federated Media and featured in a WebEx branded “free webinar hosted by industry expert.”

Who cares about disclosure, really; It does not apear to be a Federated Media priority. After all, how would transparency change anything within the highly mediated, for FM profit ”conversation.”

ALSO: Gadget Ads: Google is Threat to Media NOT Software

PLUS: Web 3.0: Madison Avenue Money Trumps TechCrunch40 Cool Apps and Mint.com: TechCrunch 50,000 Winner or Loser?

CONTACT DONNA BOGATIN

Photo credit: Valleywag