Google's recent decision to introduce advertising options not tied to keywords is a watershed event for the company. In one fell swoop, it is moving beyond the formula that made it unique and exciting -- relevancy coupled with pay-for-performance pricing -- and crossing over into the traditional world of cost-per-thousand advertising. What's driving this move? On quick inspection, it can be dismissed as nothing more than a quick grab for cash. But to me, it's a sign that Google is poised to lose its direction. Indeed the New York Times reports that some stock analysts are now suggesting that Google's advertising network will become more important to its business than its search engine.

This belies Google's origins. Its early success was driven by a pure focus on doing search better than anyone else, and keeping far, far away from the dot-com gold rush. You may recall that in its early years, it was a point of honor with Google that it accepted no advertising at all. When it finally introduced advertising, it was in discrete ads set off to the side of search results to avoid any chance of intrusion or confusion. Now, Google plans to enter the bazaar, offering graphics, animation and other elements that will let advertisers more aggressively clamor for your attention. In short, Google plans to become just like everyone else. Relevancy, the cornerstone of all its advertising programs, is now optional. After decrying the inefficiency of cost per thousand advertising for years, Google is now embracing it.

What's perhaps most worrisome in Google’s decision to even more intensely focus on advertising is that this may well lead to a reduced emphasis on its search engine. This is the mistake Yahoo! made a few years ago when it decided its Web index was nothing more than a "site feature," and actually started licensing its index in part from Google, and in doing so, fueling Google's growth. Users (a/k/a those valuable eyeballs Google wants to expose to advertising) go to Google because it is perceived to produce more relevant results than anyone else. If Google fails to deliver on this promise, or if people even start to believe Google is no longer delivering, its users will start to move to the next, new hot thing in search engines (and there are no shortage of them out there), and Google's distinction -- and traffic -- will decline.

If Google decides that its primary business is distributing advertising to its network of publisher sites, then it becomes nothing more than one of dozens of online advertising networks, focused on delivering the highest number of impressions with only a passing nod to relevance or quality. That's a huge departure for a company that built itself on being different and better.

There have been more than a few companies that found initial fame and fortune as search engines, then repudiated their roots in the race for even bigger dollars only to find themselves in much more competitive markets with little to distinguish them. Google is now at risk of repeating history. Search will remain a good and profitable business, but only for those search engines that remain committed to it. Those that treat search as a means to an end often arrive at a dead end.

IAB releases final 2004 numbers: Ad revenue up 33%
Time for a change: The Associated Press as Napsterized news
Reuters loses market share
Goldman Sachs: Q1 Was Weakest Quarter for Newspapers in Years
Librarians worry important information is being lost
CNN accused of using blogs for Guerrilla Marketing Campaign
Ask Jeeves CEO: 1Q Showed Strong Financial, Traffic Growth
rss, where art thou?
Browser Market Share Study
Prous Science Selects Cadmus/KGL for Content Production

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My inbox had an announcement from Zinio promoting browsable editions of some of their major magazines as an incentive to purchase. Previews are now available at the Zinio site via a very light and fast browser plugin that emulates most of the functionality of the current PC-based browser for downloaded full editions of magazines - including the ability to forward an issue to someone. Zinio is trying hard to make paper-formatted content work online, and while its features and performance have improved notably over the past year, it's still a challenge to read these online mags without a pretty hefty monitor. Kind of limits it on airplanes with my portable, though I've made do and enjoyed the experience pretty well. With is rich media capabilities the Zinio reader has additional tricks that are largely unexploited at this time and that will compete with aggressive Flash content development for the attention of advertisers and publishers. At the same time this seems to be the year when the universal "aha" has lit up in the minds of publishers that online content is more of an opportunity than a threat, leaving "safe" electronic platforms such as Zinio competing for attention with general Web and wireless delivery capabilities. There are still very interesting opportunities for combining paper-formatted delivery of content with online capabilities and the Zinio system has a lot of investment behind it to make it a viable platform, but there's still a lot of work to do to make the content going into user's Zinio downloads a unique and worthwhile experience differentiated from both browser delivery and traditional paper publications.

eMeta Corporation has announced enhanced functionality for its ecommerce capabilities that allows publishers and online service providers "utility pricing" models that will allow them to collect for content on a usage bases within a number of flexibly defined plans, similar to the "calling plans" implemented by telcos for their services. This tier of content payment is long overdue for exploitation in publishing, allowing content providers and providers of related services and software to allow users to pay for content on a unit basis in a way that makes its "pay per view" consumption painless and proportional to their real valuation of a service. Like phone calling plans, the right packaging within this model can allow readers and users to get "hooked" on the value of a source for a low minimum and have nominal incremental revenues that are enough to satisfy publishers and small enough to still encourage vigorous use - or upgrade to more robust subscription plans.

The "calling plan" model could also be very compatible with content repurposing and redistribution schemes, allowing users to push content to where other people's clicks could activate the same payment mechanism, in theory. Thus instead of hanging on for unrealistic pricing of pay-per-view articles (does anyone really want to pay half a magazine price for one news article?) content could be quickly monetized on a per-click basis and then spread like wildfire through redistribution and weblog links to others who will value it and click on it in the immediate moment and context. There are many types of companies that can win in this scenario, if they're willing to look at their subscription and redistribution agreements and try on this potentially powerful new model. It's likely to favor first those with little to lose and everything to gain in the new model, such as new presences in online music and gaming, but keep you eye on this as a model that can impact core business content sooner than you may think.

The Register providea a great analysis of how Microsoft's new XML document format dubbed "Metro" that's slated for next year's Longhorn update to Windows XP, noting its positioning as a portable document format that will allow application-independent printing and authoring on any XML-enabled platform. Microsoft is taking its time making sure that this is a quality release and early rumblings are indicating that reverse-compatability is going to be far less of a factor, so the universality of its acceptance is far from assured. That said, Microsoft is barking up the right tree with an XML-enabled universal container that can be freed from fatware such as Adobe's Acrobat Reader and take on a life of its own as a container with both content and functionality. This is great stuff, but it's a shame that Microsoft has the boat anchor of operating system sales and turf to defend in order to launch progressive content packaging schemes such as this. The move towards intelligent packaging of content based on XML objects is steaming along with or without Microsoft. They may yet catch a part of the wave with Metro/Longhorn, but yet again they have failed to define the wave, leaving plenty of room for alternative content packaging schemes to progress on their own. The sooner that Microsoft eases away from the platform business and focuses on universal packaging for completely portable content and functionality the better it will be for them and for all of us content producers and consumers.

Yahoo Changes News Site, Adds Features
Microsoft XML guru sees power for the people
Dow Jones launches behavioral targeting across sites
Lawsuit Charges Circ Scams at Milwaukee Paper
Search engines, startup media sites dream of becoming video hubs
Google AdSense for RSS running at Weblogs, Inc.
RSS|vp Adds Branded News and Podcasting Readers to Its Marketing Arsenal
NewsGator Private Label Demo
No Google, please, we're French
Print learns to love the web
eMeta Enhances eRightsWEB, Allowing Software as a Service and Content Providers to Employ Utility Pricing

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Online Media Daily notes that Newsweek magazine has opted to post articles on their Web site throughout the week, because - who'da thunk! - traffic falls off after their weekly postings. This is in addition to audio podcasts and Web-only content, indicating the rapidity with which major magazines are moving away from the "online exists to promote print subscriptions" model to a model that accepts the need to cultivate relationships with online readers as revenue-generating end unto itself. Weekly news magazines have a lot to lose in today's content mix as readers opt for a broad array of online events commentary with more focused editorial outlook dispensed in constant streams. Oftentimes adapting to user lifestyles means abandoning long-cherished product concepts ("We're a weekly magazine") and recognizing that controlled distribution is no longer as important as maximizing consumption through essentially limitless distribution channels. Print continues to play a role in this mix, but increasingly as a specialized outreach tool to maintain loyalty to online offerings. The sea changes overtaking publications born in the print era continue to mount in strength, challenging all publishers to consider how to market editorial content through as many channels and contexts as possible to allow users to discover content. Early days for these publications for radical online changes, but given the lack of profitable options, there's no choice but to adapt or die.

Recent earnings and forecast reports by Elsevier, InfoUSA, and Thomson point to a strengthening market for their core database products, even as rumblings of Reuters raising pricing on its financial data offerings indicate one of the "whys": seat counts are stabilizing for the moment in major sectors such as finance that had been bleeding users for the better part of four years. For the moment the economy is providing major aggregators some breathing room and some cash flow from existing products to concentrate on acquisitions that are allowing them to penetrate new and existing market sectors more effectively. This is reminiscent of earlier economic recoveries, providing a sense that there is a certain return to "normalcy," albeit with some whistling in the wind. When you look carefully, the gains are strongest where investments in more content integration and workflow capabilities are paying off in conjunction with key acquisitions feeding these systems. This sophisticated approach to creating content value draws database publishers ever closer to being primarily software solutions providers that happen to have licensed content at their disposal, even as software providers move increasingly towards subscription models that resemble long-established content licensing models. There's reason to enjoy this recovery in the short run, but expect more solutions to reach the marketplace in the next few years that make it easier for professionals to purchase both content and functionality in a more modular, ad hoc fashion that can move very quickly to adjust to rapidly evolving client requirements. Aggregation is here to stay, but the value proposition is still on the move away from database publishers that cannot become the center of a user-centric content consumption culture.

Buying spree doubles profit at Thomson
InfoUSA posts record revenue
Reed Elsevier Sees `Generally Improving' Business Conditions
Veronis buys Facts on File
Next: The Google Street Journal
World Intellectual Property Day
RSS: Cool Tool for Search Engine Marketing
The Smart Money Behind Video Blogging
Findory: Read, Learn, Personalize
Newsweek.com To Post New Articles Daily
Research and Markets: Almost 22% of Law Libraries Have Materials Budgets Greater Than $350,000
Aungate, Complinet Partnership to Deliver World's First Automated Compliance Information Platform
Reed Elsevier companies choose Bookmaster
Intellext Introduces Suite of Tools at Software 2005 for Online Content Providers to Leverage Context
ProjectForum Makes Wiki Collaboration Easy

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Newspapers Find National Ads a Tough Sell
Netscape pioneers launch free content network
Thomson Reports Stronger Profit, Raises Dividend
Time Inc. Plans Long-Term Mobile Strategy
Google to launch RSS advertising?
JupiterResearch Reveals Growing Preference for Online News at the Expense of TV and Newspapers
American Urological Association, Elsevier Announce New Partnership
Inxight Software and A.I. Tech Software Partner to Provide a Powerful, Intelligent CRM Experience
Open Media Network, Launches Web Beta: A Free Consumer Service for Viewing Public Service Content
Mintz Levin Selects Contact Networks' Innovative Enterprise Search Solution
Intermix Media Extends Reach Through RSS Content Syndication for Greater Advertising Opportunities

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Google Weighs Changes to Ad Strategy
Primedia explores sale of business information unit
A Hundred Cellphones Bloom, and Chinese Take to the Streets
The Year of Living Wirelessly
Newspapers struggle to avoid their own obit
Roll up for 'FT' sale of the century
EU approves BT Group's acquisition of Radianz
ProQuest to digitise parliamentary papers
Reuters picks up 26% in Times TV
What is Structured Blogging?
Stock recovery eyed by Thomson Financial
A Boldface Name Invites Others to Blog With Her
Innovative Knovel Program Helps Institutionsmake the Transition to a Virtual Library
Digital Information Network Launches Streaming Newscast Service for Local Broadcasters
Wolters Kluwer Health's Medi-Span Web Site Wins National Award
Crystal Semantics Patented Sense Engine Now Available in Server Side, Client and WEB Versions
FindProfit.com Provides Updated Research On Mobile Content Providers

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Professionals of many stripes came together at the workshop on current and future trends in indexing held by the National Federation of Abstracting and Information Services (NFAIS) in New York last week to get a handle on what's creating value in indexing today. The session made clear that publishers who have long relied on high-quality indexing to bring in revenues are not having much fun in an environment that increasingly favors the ad hoc over long established content structure for bringing in profits. The future of professional indexers may be smaller in terms of their pre-automated past, but these same tools are also providing new opportunities for both professional indexers and their users - those "howlers" - to create more content value.

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According to published reports, newspaper executives at their annual conference received what was described as "startling" news from a team of McKinsey & Company executives - - their classified advertising businesses have eroded noticeably, and are poised to drop as much as 20% more by 2007. The cause of this steep decline: Internet competitors such as Monster.com, Craigslist and RealEstate.com.

I want to empathize with these newspaper folks -- we're in different wings of the same business after all -- but for people whose business is gathering and reporting news, they always seem to be the last people to know what's going on. Of course, this may be some form of denial as well. In either case, it's worth taking a closer look at one type of classified advertising, help wanted ads, because what's driving this decline isn't unique to newspapers.

In many markets, newspapers are effectively monopolies, and their pricing tends to reflect that. I've placed more than a few newspaper help wanted ads, and if you're not careful, you can easily drop close to $1,000 for a few lines of type that would generally appear only once. It's not surprising, then, that the McKinsey study quotes a newspaper executive as saying that, "Classified advertising is more profitable than printing dollar bills."

Along comes the Internet, and suddenly the reach of newspapers can be duplicated, and even expanded upon, without the infrastructure costs. It's been open season on newspaper classifieds ever since. Just as significantly, these online competitors realized that without paper, ink and delivery vans they could charge a fraction of the price and still make boatloads of money, a development that McKinsey refers to as "price destruction."

But there is more going on with these online job sites than just lower prices, and therein lies what I consider the most important point of all: these online job sites aren't just competitive businesses; they are better businesses because they've streamlined the hiring process and integrated themselves into their customer's workflow.

Consider the improvements. With newspapers, you would often wait for the big Sunday edition to advertise. Online, you're receiving responses within minutes of posting your ad. With newspapers, your ad is forced into a category, which may or may not be where people are looking (newspaper solution: buy cross-reference ads!). Online, your ad is accessible by category and by keyword, improving discoverability. Online, you reach a national if not global audience, and your ad stays visible longer. These are all what I'd call the "built in" advantages of Web information products. But there is still another level of benefit.

The job sites allow job hunters to post detailed resumes for free, and they sell access to these vast databases so that companies could search for candidates as job hunters were searching for open positions. The job sites built workflow applications for their customers to help them screen, filter and organize incoming resumes. Credit, of course, must also be given to the job boards for turning paper resumes into a digital stream that can be more easily forwarded, stored and archived. The sites offer automated screening tools to pre-qualify candidates, and will even manually screen and select candidates for an employer. On the job hunter side there has been workflow improvement as well. Job seekers can get real-time alerts of new job postings matching their criteria, and can even forward their pre-stored resume to a prospective employer with a few mouse clicks.

In short, the business of help wanted advertising hasn't just been digitized, it's been revolutionized by these new players. And now a new breed of players, companies like, ZoomInfo, Linked-In and Ziggs are bringing still another level of innovation to this business.

And newspapers? High overheads, declining circulations, slow-moving bureaucracies, and a penchant for trying to wish away uncomfortable business changes. Given that it's 2005, what should be startling to the newspaper industry isn't that their classified businesses are in decline. It's that they have any classified business left at all.

They must be dancing in the halls at the Googleplex. Their Q1 2005 results [premium site]were spectacular, exceeding analysts' expectation. As a result, their stock price is up to almost $216 per share (as of noontime on Friday, 4/22). Over at nearby Yahoo! headquarters there must be some puzzlement about why their stock price isn't on a similar trajectory, despite having released results that also exceeded expectations just the day before (Yahoo!'s stock price is at approx. $34.5 at noontime on 4/22/05, down more than a dollar from the day before).

Both companies are benefiting from the strong growth in online advertising, and both companies had first quarter revenues that were remarkably similar (Google $1.26 billion; Yahoo! 1.2 billion). There are, of course, many similarities in the two companies' businesses. First and foremost, they compete with each other for search traffic and online advertising dollars. In analyst webcasts this week, both companies stressed growth in non-US markets as major objectives. And executives from both companies pointed to an increased focus on winning a larger share of the budgets of the largest advertisers. Terry Semel put it this way(paraphrased): currently about 2-4% of big advertisers' budgets are spent on online advertising; consumers spend about 14% of their time online; therefore the share of ad dollars is obviously going to continue to move online to place messages where customers will see them. Google also said that their direct sales force is focused on increasing penetration in Fortune 1000 companies to win their ad dollars.

The impact on the traditional advertising industry will be dramatic as more dollars are directed online. Both Google and Yahoo! are offering a wider range of online ad options and increasing the level of service they provide to big advertisers. Increasingly, ad agencies have to demonstrate their expertise in creating online and cross-media campaigns. Watch for more acquisitions of SEM companies by the big agencies. And, watch for more intermediaries to emerge that can facilitate full-service online branding, search optimization, and ecommerce programs for large companies.

At the same time, there is lots of upside for smaller players in the online advertising space. The skyrocketing stock price for Google in part reflects heady enthusiasm for online advertising in general. Yahoo! has a more diversified revenue model that includes a variety of paid content, which may explain why, in the short-term, it's share price isn't tracking with Google's. Shore will continue to track the performance of these two leaders in search and online advertising to see how their results compare in the future.

Google Net Soars on Web Ad Boom
DoubleClick Quarterly Profit Falls
DoubleClick sale may be imminent
Analysts: Newspapers Could Lose $4 Billion to Internet
Blinkx Co-Founder Interview: Patterns point to useful data
Taunton's titles stay close to homes
A blog reveals the mind of Sun
Virtual roundtable: Grassroots journalism leaders discuss the nitty-gritty
Odds No Deterrent, as Many Try to Start Magazines
With Adobe acquiring Macromedia, will websites become obsolete?
First Film About Blogs Anticipates the Future of Independent Grassroots Movie Production, Distribution
With Matrix Terminated, Goal Of Law-Enforcement Data Sharing Remains Unresolved
Blogs Will Change Your Business
Wurld Media Reveals Technology Behind Their Legitimate P2P File-Sharing Network, Peer Impact
Fox Net Sees Custom Ads from Visible

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Reuters: May Lift Prices As Fincl Data Mkt Revives
Google Print Draws Kudos, Skeptics at ACRL
Dow Jones Faces Scrutiny on Stock Proposal
Washingtonpost.com might offer local, national home pages
Rojo - The Return - As a Taggregator
New Vertical Search Engine helps Information Technology Students
Calculating the new readership
Resurrecting the Online Past
NBC chief mulls blogs for top news anchors
Jeremy Wright to launch new blogging venture
Towards Universal DRM
Google UK launches maps and local search
New API for Factiva SalesWorks Boosts Sales Tools with Company, Industry and Executive Info and News
blinkx Introduces Customizable and Sharable Smart Folders Pioneered by 'Hitchhiker's Guide to the Galaxy'
Open Text To Support Content Integration Standard For Improved Compliance and Content Management

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As noted by AP via numerous outlets online...well, that kind of says it all right there, doesn't it? The AP's move to charge news outlets for online use of its content is a fairly neutral move from a revenue standpoint, given how they're restructuing short-term membership fees to accomodate the move, but it's a clear statement to its membership that it needs to play on a level playing ground online with member outlets and highly successful portal outlets for its content such as Yahoo! News. In broader terms its a recognition that news aggregation is taking on new forms online, with its member news organizations having to play less exclusive roles for distribution via search engines and feed aggregators and more inclusive roles for content sourcing from suppliers other than AP. AP is in a very interesting position in the rapidly evolving landscape of news generation, playing a powerful role as a value-add aggregator and distributor of news content while trying still to service news organizations that are struggling to find the most effective positioning for their content and ads online. It's far from clear that the AP will be able to manage this role indefinitely without broadening the range of sources that it manages and considering other revenue sources, but in the meantime declaring online use as a key revenue stream is an overdue recognition that AP's future lies with online distribution.

The media world is abuzz with coverage of the acquisition of Web publishing and multimedia tools provider Macromedia by Adobe Systems[CNET News coverage], fairly mixed reviews for the most part. There are observations that Adobe couldn't make a slim piece of software to save its life, while Macromedia dominates many segments of Web publishing with its Dreamweaver tools and enjoys heightening popularity of its Flash plugins to deliver online multimedia content. There are also claims that this combination represents a viable cross-platform alternative to Microsoft for content delivery. Hmmm, this last one seems a little far-fetched, but when you throw rights management capabilities already well ensconced in Adobe formats and gaining ground in Flash one does see the outlines of a matrix of rich content delivery capabilities that will have a lot of appeal to both the corporate set and media companies. I leave the analysis of the under-the-bonnet bits to the tech analysts, but with platform proliferation making it more complex for content creators to have effective and efficient cross-platform packaging the combination of these two forces is likely to provide some interesting solutions for publishers of all kinds. And hopefully for good measure the influence of Macromedia will witness the dawn of PDF readers that take less than a good turn of the second hand on my watch to load...

AP To Charge For Web Content
Adobe ready to battle Microsoft
LexisNexis Warns 280,000 of Info Breach
Internet feeding, not beating, other media
Scale Doesn't Scale: Aggregation is the New Scale
All the news that's fit to post: Newspapers figure out a future
Meet the Gamers: Preparing Libraries for the Nintendo Generation
Tag Teams Wrestle With Web Content
It's All About Content: the Need for RSS in Press Relations
Blogdigger Joins PubSub in Supporting FeedMesh Intiative
Siebel Systems and FAST Form Long Term Partnership to Integrate FAST InStream
LexisNexis(R) File & Serve Receives Recognition for Use of Isilon IQ Clustered Storage
Open Text Introduces Unified Livelink ECM Platform

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As reported by the New York Post in the face of tumbling ad revenues Dow Jones Chairman and CEO Peter Kann is moving up DJ's top marketing and ad executive Scott Schulman to a new Chief Strategy Officer position while Judy Barry, a star ad salesperson plucked from The New York Times, will take over Schulman's slot and report to WSJ Publisher Karen House. We ranted on the state of WSJ Online's marketing a few days ago in our weblog, but clearly its not just the Joneses who are having a hard time keeping up with the new Joneses of news content. The LA Times' recently announced a media blitz to boost circulation and other news outlets are struggling similarly. The main difference is WSJ's stoic defense of its online subscription content, which may have defended its premium ad pricing to some degree but at the end of the day does not seem to have driven up the readership necessary to attract offsetting online ad revenues. As noted in this week's news analysis content distribution is not as important to driving revenues as getting self-distributing content into the right contexts. Dow Jones certainly has a noble legacy in driving electronic content via its wire services and newspapers to important business contexts, but in the post-distribution era of content the "there" of content value is all about the reader, not the vendor, forcing many news organizations to rethink the basic nature of their offerings. Hopefully these moves by Dow Jones address their core product and product strategy as much as short-term ad sales.

Shore Senior Laurie Webster-Saft provides insights into the recent DCI Portals, Collaboration and Content Management conference in Scottsdale, Arizona.

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