Archive for the ‘Portals’ Category

Why Huffington Post Is The Perfect Acquisition For Yahoo’s Media Strategy

8 Jun
2010

by Ben Elowitz

Last month, I wrote a post titled “Associated Content is Yahoo’s First Big Media Move. Here’s What Should Come Next,” in which I pushed Yahoo to acquire premium content properties to overcome the commodity signal they sent by acquiring AC.  I said at the time that Huffington Post’s curation model “crowdsources content but applies a strong point of view and features premier branded names, lifting it above the commodity fold.”  For Yahoo, Huffington Post is the perfect combination of premium and economical.

Now, over this last weekend, Erick Schonfeld wrote at TechCrunch that deal discussions between these two publishers are underway for a content partnership or outright acquisition. Though Arianna Huffington denies it, other sources indicate that HuffPo has been on Yahoo’s short list, and I wouldn’t be surprised if conversations have been ongoing.

While  Yahoo had previously announced intentions to compete in news by hiring brand-name reporters, that direction is fraught for the big portal:  the news category is difficult to lead with a heavy demand on consistently breaking  news — and it would take years for Yahoo to build the credibility in original reporting to become a true audience magnet.   And the prize for winning even if they do?  It could be losses, not profits, as has been born out by the experience of myriad old media outlets who are now making over their businesses.

What Huffington Post represents is a far better road for Yahoo to go from portal to destination in a realistic way.  HuffPo can draw audiences not by competing with the news outlets on reporting but with great access and point of view – both of which are within Yahoo’s brand and execution reach.  It would serve as an anchor property with true destination draw.

Indeed, Huffington Post may be unique among the news-oriented sites of the portals, curators, and aggregators in having earned true premium positioning.  They did so by emphasizing a strong and reliable point of view along with affiliation with notable brands (such as regulars Arianna Huffington herself, Bill Maher, Harry Shearer, and Rosie O’Donnell, along with guest posts from a robust range of influentials).  Along the way, the site has also earned an outstanding brand and destination audience of 22 million (comScore), consistently garnering visits from both search engine referrals (14% of traffic from Google according to compete.com) and social networks (16% from Facebook).

This destination draw is critical for Yahoo.  At Yahoo’s home page, 73% of monthly viewers are there to get their mail – and that usage is shrinking at (2%) per year (comscore April 2010 vs. April 2009) vs. a US internet universe which grew at 10%.  As Yahoo commits to a media-company destiny, its strategy must be to create high-end destination titles that will draw premium advertising – not just keep mail users on-network longer.

For those in charge of Yahoo’s media properties, David Ko and Jimmy Pitaro, they would get two other benefits to leverage:  HuffPo gives Yahoo a premium curation model prototype for it to replicate; and a DNA transplant to bring in the talent and experience to scale that model.

As far as the first, Huffington Post has shown itself to be the best of the curators, establishing a strong point of view that draws a huge audience with near-zero cost for original content.  And the model – the fame and traffic of Huffington Post beget contribution from interesting people, which drives more fame and traffic for Huffington Post’s brand – is replicable in other categories, as HuffPo has shown with its entertainment category rumored to already reach an audience of 10 million monthly, according to internal measurements.  This is the sort of model that Yahoo should be banking on, as commodity content alone will never make Yahoo a premier media company.

Perhaps more importantly, there is nothing to catalyze the adoption of a new direction like bringing on a talented and effective crew.  An acquisition of Huffington Post brings not just a branded destination, but a whole crew of operators with a scarce and effective set of skill, approach, and attitudes.  Those genetic elements are exactly what Yahoo needs to quickly set a new approach to existing properties with large audiences, such as entertainment, shine, and omg!, as well as to each new title launched.

All in all, an acquisition of Huffington Post would form the perfect foundation for Yahoo’s new ambitions as a premier media destination – and would be well worth the several hundred million dollars it would surely cost to set a bold and profitable strategy for Yahoo to be a premier media company.

Associated Content is Yahoo’s First Big Media Move. Here’s What Should Come Next

19 May
2010

by Ben Elowitz

With yesterday’s announcement of the acquisition of Associated Content, Yahoo CEO Carol Bartz has sent a loud message:  Yahoo is investing in becoming a new kind of digital media company for the new age of digital media.   Cheers to Yahoo for recognizing that their “1.0” model needs an upgrade to be more effective in a 2.0 world.  The only problem is that this move gets Yahoo just one step toward where it needs to go.  It could be a powerful first step to add content and audience to their network, but will only be strategically valuable for Yahoo if it is layered with additional new investments to build true destination media sites with premium positioning.

Let’s explore what Yahoo gets from AC first, and then cover what Yahoo must do from here if it is serious about winning in media.

1. Yahoo gets commodity content at commodity cost. With Associated Content’s marketplace, first and foremost Yahoo can source commodity content – i.e. the kind of content that doesn’t need a particularly differentiated author, original reporting, or other hard-to-find talent – cost effectively.

2. Yahoo can improve time (and value) on network. In this age of deteriorating portal power, users come to portals primarily for one reason:  mail.  (According to data from comScore, 73% of Yahoo’s viewers of its most valuable real estate – the home page – are Yahoo Mail users.)  Once they arrive, however, there is far more money to be made by vectoring them to networked media properties like Yahoo Finance, Sports, and Entertainment than by serving additional pages of poorly-monetizing email.  So, by beefing up the available content in the network, Yahoo receives the benefit of extending visits at low cost.

3. Yahoo increases its audience by drawing traffic from Google. Yahoo’s made the strategic decision to move its focus out of the search game and onto media.  And so rather than just feeding them from mail and search, Yahoo needs its content properties to draw audience on their own.   The AC content marketplace can produce thousands of pages per day of content – each one baiting more search engine traffic, and all produced at modest cost.  A recent EConsultancy interview with CEO Patrick Keane revealed that the bulk-buy strategy works:  “80-90% of our audience is driven through natural search,” and according to comScore data, nearly 50% of the traffic that AC’s content sees each month is incremental to Yahoo’s core audience that comes for mail most days.

All three of these improvements have financial benefits to Yahoo – both in increasing revenues with greater reach and traffic; and in bringing down average cost of content. But they miss out on the strategic positioning that Yahoo absolutely must own if it wants to ensure a leader as a top digital media company:

Yahoo needs to be a premium destination; and the AC acquisition message undermines that positioning. Read the rest of this entry »

The New Rules For Judging ‘Quality’ In Published Content

11 May
2010

by Ben Elowitz

This article by Ben Elowitz originally appeared as a guest post on paidContentEngaging Readers Online

Last week, I explained why the traditional ways of judging “quality” in published content are useless in the digital age. Judging by readers response to that piece, those dated values (which I labeled credential, correctness, objectivity and craftsmanship) are still sacred to many people. But here’s the problem: They simply aren’t enough to win audiences, drive financial success, or, for that matter, ensure viability. The demise of institutions like Newsweek proves that—and shows that publishers that don’t move beyond these anachronistic measures of success will perish.

So this week, I’m offering part two of my take on the changing definition of quality in published content. Here are the four new rules of quality that publishers must obey to flourish. The biggest difference between the old and new definitions of quality are who’s doing the judging. In the era of Publishing 1.0, when production costs were high, alternatives low and time ample, the editor deemed something quality or not. But today, content isn’t scarce at all—in fact, it is in oversupply. And it is the audience that judges quality directly, dozens of times per day.

So, according to the audience, what is quality?  It comes down to these four characteristics:

—Relevance. Read the rest of this entry »

With “Glo” Launch, BermanBraun and MSN Show Something Rare: Creativity!

6 Apr
2010

by Ben Elowitz

One of my favorite questions to ask recruiting candidates is: “What content sites have a unique and differentiated user experience?”

The usual answers are as tiresome as the state of web design:  YouTube (yes, it is fun to keep clicking), Hulu (yes, they got the experience right for TV viewing), and lots of pauses and comments like “I don’t know, it’s kind of all the same.”

Let’s face it:  publishers are formulaic herds.  And the formulas are boring and tired for users.  How bad the state of the art is when Huffington Post gets major props for going with a single full-screen hero shot on its home page – and that’s considered breakthrough!

So that’s why I’m incredibly impressed with what MSN’s Scott Moore and BermanBraun’s Lloyd Braun and Gail Berman have done with their newest creation, Glo.  From logo to flow, the site’s design lets go of the old formulas, tries something new, and most importantly, takes risks.  New layouts, new interactions, and new forms of content all create a feeling that this is not an ordinary website.  Even more, they have defined their own style that is adventurously well-suited for their audience.

To start making money, publishers need to create consumer experiences that stand out.  As MSN’s Scott Moore said in a post by Kara Swisher, “we see a lot of room to grow by offering something different and of higher quality.”  These premium visceral experiences are exactly the path to profit in digital media:  they will attract loyal audiences, premium advertising dollars, and over time create opportunities for upselling to consumers.  And those premium experiences are, after all, the root reason why everyone is so excited about the iPad this week.

Apple doesn’t need to be the only one that can innovate.  This kind of innovation is rare among publishers, and yet all too valuable.

For heaven’s sake, if MSN can do it, everyone can.

Quote of the Week: Carol Bartz – Not Much Rocking And Rolling in Media

6 Mar
2010

by Ben Elowitz

From Abbey Klaasen’s AdAge interview with Carol Bartz this week:

Ad Age: You came into the advertising space as an outsider. What has surprised you about the industry?

Ms. Bartz: For an industry that’s based on creativity and inspiring people, I don’t know why it’s so afraid. I don’t think it should be afraid to just try some crazy new stuff. But when I talk to people about online marketing, they just seem to freeze. … I thought this was going to be a much racier industry that wore black and got out there and rock and rolled and I see it being a little shier. I mean, I’m the crazy lady.

Perfectly said, Carol.  The media industry has all the pressures that come from wholesale technology disruption:  the economics are collapsing, and no one knows quite what to do.  But the response  from too many media companies is to stand still while they shake, instead of moving forward.

Yahoo Bets on Video

11 Jan
2010

by Ben Elowitz

Last week, Yahoo announced that it will be working with Ben Silverman and his new firm Electus to develop original video content.  Notably, this video content will be designed from the get go to appeal to advertisers.

For Yahoo, this is a smart move that demonstrates they are willing to double down on the short-form video programming category.  And with good reason:

  • Video is the fastest growing segment of advertising demand. Many publishers are finding more demand for video than supply, and more importantly, for Yahoo to have a full package to meet advertisers’ needs and secure the best premium campaign opportunities, they’ll need plenty of video inventory.
  • The CPMs are high – although pricing for video ads depends on the format and placing, the average CPM is over 10x that of normal banners.
  • Because premium programmed video is still a relatively immature category, Yahoo (or others) may be able to stake a claim with various short-form video programs.  (The major networks and Hulu are covering their traditional broadcast long-form shows; while YouTube is great the great unwashed of 100,000,000 videos — a small pecentage of which are valuable.  But the middle is open territory.)
  • Yahoo is reporting success with programs like Prime Time in No Time (which Yahoo claims to be the most watched original internet program in history) and Yahoo Sports Minute.  Great to see them build on successful experiments with more.

Yahoo is smart to leave the reservation for a new effort like this:  after all, the key to the success of any new program will be establishing them as destinations with consumers.

If these are just another node in the Yahoo network, promoted from the home page, they will fail to provide any strategic value.  To succeed, Yahoo will need to temporarily ignore the pulls of the various existing Yahoo content properties in order to create a new one with its own audience.

And if freedom is the requirement, what better way to embrace it than to turn to an outside agency, which won’t have any of the overt or subtle pressures that an internal group will.  Plus, it lets Yahoo be more bold and risk-share with a partner, again a plus to advance Yahoo’s strategy.

The big watchout to Yahoo:  they had better do as well appealing to consumers as to advertisers.  To be a financial viable initiative, they’ll not only need the big dollars of brand sponsorships, but to build and sustain an audience.  Otherwise, it will end up looking great in the design and business reviews, but never really getting traction, like Google Video which failed with its premium content while YouTube flourished; and MySpace’s initial efforts to create premium sponsorable content channels in 2007.


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