22 Michaels on an amazing presentation on why you should do business in Stockholm. It’s a shame more government agencies can’t do shows like this.

MIT’s Center for Civic Media writes up a discussion by the boss of Google News. I give this more of a write up in Grappling with Online Media.

Scamworld. Not only is The Verge’s expose of the online get rich quick community a great read, it’s also shows one of the future media models.

Business Insider has the real story why the tale of LinkedIn buying employment site Monster was made up. This is great example of how merchant banks try to create a market for flogging client assets. The managers of Football players do exactly the same thing.

Is there money in Big Data? MIT’s Technology Review doesn’t seem to think so.

Ending the era of the megastore. The Fiscal Times on how Wal-Mart is re-inventing itself.

Tomorrow’s blog looks at phishing scams and how social media is helping the more targeted “spear phishing”.

Much of Richard’s discussion centred around disruption – the newspaper industry was disrupted in the 1950s by television and by the 1980s most print markets had seen several mastheads reduced to one or two.

The remaining outlets were able to book fat profits from their monopoly or duopoly position in display and classified advertising.

By 2000, the web had killed that business model and the newspaper industry was in a decline that continues today as aggregator sites like Huffington Post steal page views and Google News further changes the distribution model.

One of the problems for the news industry is how different the online mediums are from print, radio or television broadcast. The struggles of media startup The Global Mail is a good example of this.

In the middle of last year news started trickling out that one of the Australian Broadcasting Corporations’s top journalists, Monica Attard, had left the broadcaster to set up The Global Mail, an online news site funded by Wotif founder Graeme Wood.

The site launched on schedule in February 2012 and underwhelmed readers with pedestrian content and a confusing layout. By May, Monica Attard announced she was leaving the organisation she’d founded.

Tim Burrowes of the media site Mumbrella examined why the Global Mail is struggling, his Nine problems stopping The Global Mail from getting an audience details how the site doesn’t use online media effectively.

At heart is a fundamental mismatch between the methods of journalists raised in the “glory days” of print and broadcast journalism against those of the online world, not least the much harsher financial imperatives of those publishing on the web.

One key problem it the TL;DR factor – Too Long; Didn’t Read. Where online readers tend to leave stories after around four hundred words.

Richard Gringas is quoted as encountering this problem when he worked at online magazine, Salon.

At Salon, articles were paginated, but only 27% of readers made it to the end of the four-page articles. Compared to competitors, Richard was told, this was a good benchmark. But with fresh eyes, he was astounded that a product was being produced with the knowledge that the vast majority of the audience would not consume the entire piece. Richard loves the long form, but if the objective is to convey information, we need to think about the right form for the right medium at the right time.

So “long form” journalism has to be written the right way and it has to be backed up with good visual components and have “short form” versions suited to the more impatient readers who make up the bulk of the web audience.

The New York Times made a step in this direction with their iEconomy series on how the US middle classes have been displaced with manufacturing’s move to China.

An even better example of journalists using the web well is The Verge’s Scamworld where an online expose of Internet get rich quick schemes and the conmen behind them.

Scamworld shows us what skilled journalists can do online. The amazing thing is the site’s new steam is tiny compared to those of established outlets like the New York Times, Guardian, Fairfax or those of News Corporation.

This failure to execute by incumbent news organisations isn’t because they are lacking talent – every young, and not so young, journalist has been required to have multimedia skills and the ability to file stories in multiple formats for at least a decade.

Old Media’s problems lies in the mindsets of senior journalists, editors and their managements who are locked into a 1950s way of thinking where fat advertising revenues funded the adventures and expense accounts of roving reporters who tough as nails editors occasionally bullied into filing stories.

That model started to die in the 1980s and the Internet gave it the last rites.

Richard Gringas’ discussion at Harvard shows news and journalism isn’t dead, but it is evolving. Just like many other disrupted industries, the news media has to adapt to a changed world.

That consumers of media want it but aren’t prepared to pay for it is a basic truth; the 20th Century media model is based upon advertising subsiding journalism and entertainment.

For all forms of media this was true; from TV and radio stations being fully funded by advertising to newspapers and magazines’ cover prices barely covering distribution costs.

Take out advertising and all these models are dead. The only alternative is government funding.

Losing the advertising rivers of gold to web services is what’s killing the established business model. It appears that TV and radio will hang on, for now, but newspapers and magazines are in serious difficulties.

Simply put, there has rarely been a market for journalism; readers and viewers aren’t prepared to pay. Journalism’s golden years of the 20th Century were based upon having a relatively captive market for advertisers; now advertisers can go elsewhere, they have.

Putting a sophisticated  label on a basic concept is something consulting companies are very good at and Boston Consulting Group has done an excellent job with this report.

The fundamental truth is that it doesn’t matter how good your product is, if you can’t find a way to make someone pay you for it then you don’t have a market or a business.

Which is what the real challenge is for online content creators, finding the model that pays. The first person to do that becomes the 21st Century’s Randolph Hearst.

This gutless and disingenuous defence is a common one used by those caught distorting facts or outright lying to advance their causes and enrich themselves.

Perhaps the Mike Daisy expose, along with the sad events around the Stop Kony campaign, should make us consider who is a journalist and what journalism is.

Is journalism reporting the facts as we seem them or describing the world around us? If so, does a “journalist” have to work for an established and recognised media outlet?

The modern idea of warrior, professional journalism was born in the 1930s with celebrity journalists like Ernest Hemingway or Evelyn Waugh reporting from Spain or Ethiopia.

In the 1960s we saw this idea become established through the Vietnam war and reached its peak in the early 1970s with the Watergate scandal.

Today, someone who is an actor by trade can be appointed as the technology correspondent by a newspaper and automatically become a credible journalist in their field.

At the same time someone with years of experience in their field — it could be food, travel, technology or anything else — is sneeringly derided as a “citizen journalist” by those who draw a cheque from the established, and dying, media should they decide to self publish.

The sad thing is much of what is published as “journalism” by the established media outlets is entertainment and many of the “facts” reported are self interested propaganda promoting the latest music star or pushing a political agenda.

All too often, those claiming to be credible journalists are being used to give the illusion of of credibility on things that simply aren’t true at all.

We need to re-evaluate what journalism is and how misleading and self-interested reporting distorts debate, markets and the democratic process.

A start would be in ditching the “journalism as entertainment” meme.

During the mid 1980s the Ethopian famine was bought to prominence by Live Aid and Bob Geldof using music videos and live television made possible by huge leaps in broadcasting technology.

Nearly thirty years later we see an African tragedy – this time the Lord’s Resistance Army in Central Africa – again bought to the West’s attention through new media and advances in video technology.

Each time there’s been an outpouring of outrage and determination by those of us in the West to ‘fix’ Africa’s problems. We demand our leaders do something so we march, we donate and these days we retweet or like an online video.

In many ways  we’re like Alden Pyle, the idealistic and well meaning anti-hero of Graham Greene’s The Quiet American who believed a ‘third force’ can fix the problems of Vietnam in the 1950s.

At the time Graham Green wrote The Quiet American in the late 1950s, the Eisenhower Administration had several hundred US military advisers in Vietnam, sent by President Truman at the beginning of the decade.

Today, at the time of the Stop Kony campaign in 2012, the Obama Administration has ‘about’ a hundred advisors in Central Africa.

Sometimes we don’t reinvent anything; we just use modern tools to repeat our grandparents’ mistakes.

Sports broadcasting rights were invented.

In the 1970s, sports administrators resisted live TV coverage of games because it would affect their revenue.

Sports broadcasting rights became lucrative.

In the 1980s, sports administrators claimed TV viewers using video recorders would affect their revenue.

Sports broadcasting rights became more lucrative.

In the 1990s, sports administrators worried cable and satellite TV would affect their revenue.

Sports broadcasting rights soared.

In the 2000s, sports administrators warned the Internet would affect their revenue.

Sports broadcasting rights soared further.

In 2012, sports administrators shout that cloud computing services will affect their revenue…….

Photo courtesy of mzacha on SXC.hu

The offer was Jeff, who is a builder, would donate his company’s work to a television home improvement show and in return Jeff’s business would get a mention in the credits as well as some coverage in the program.

Jeff agreed, had new t-shirts for his labourers printed and they did three days work helping celebrity gardeners refurbish a backyard.

The guys had a ball, the labourers chatted up the presenter and the pretty production assistants and for a day or so Jeff felt like he was in Hollywood.

A few weeks later the show went to air – there were a couple of glimpses of Jeff’s guys doing stuff and if you were quick with the freeze button you could pick out part of Jeff’s business name and phone number.

When the show finished, Jeff’s business appeared for a split second which was difficult to read if you were lightning fast with the remote control. Not a great return for several thousand dollars of labour and materials.

That was an expensive lesson for Jeff.

Recently I heard of a business that was asked to contribute some of products to a newspaper – they wanted an ongoing commitment that would cost the business quite a bit of money.

For the newspaper this is a great deal – they tie in a promotion for their readers that costs them nothing. The business is left out of pocket with little upside except for some “exposure” of dubious value.

We see this repeated every day by dozens of businesses being seduced into offering fat discounts for group buying sites. The salesman’s spiel is that a prominent offer will get exposure on their email that goes out to thousands of people.

Most of these promises are nonsense; giving away your time or work for free is the most expensive thing a business can do and if it’s going to work it has to be part of a strategic plan.

It’s been said all publicity is good publicity, but that’s not really true if there’s no return on a substantial effort.

Blindly giving things away in the hope of getting some free publicity isn’t a good business practice and those who urge you to do so aren’t acting your best interests as Jeff learned.

So it wasn’t a surprise to read at the beginning of this year that Microsoft were allocating $200 million for marketing Windows Phone in the US alone.*

The Consumer Electronics Show is the high temple of tech journalism with thousands flying in from around the world to breathlessly report on the latest wide screen gizmo or mobile device

At the 2010 show, 3D television was going to be the big consumer item while at the 2011 event it was going to be Android based tablets that were going to crush the Apple iPad.

Despite the millions of words written and spoken about these products, both flopped. So it was no surprise we were going to see plenty of coverage of Microsoft given the budgets available and it being the last time Microsoft’s CEO, Steve Ballmer, would give the CES keynote.

Microsoft’s CES publicity blitz kicked off with a rather strange profile of Microsoft’s CEO in BusinessWeek which if anything illustrated the isolation and other worldliness of the company’s senior management.

The PR blitz worked though with Microsoft tying for first place in online mentions during the show according to the analytics company Simply Measured.

After the show the PR love for Microsoft continues with Business Insider having a gorgeous piece about why Windows Phone will succeed and criticising tech blogger Robert Scoble’s view that the mobile market is all about the number of apps available.

Scoble replied on his Google+ page explaining why apps do matter and adding that most of the people he meets hate Windows Phones, the latter point not being the most compelling argument.

The most telling point of Scoble’s though is his quoting Skype’s CEO that they aren’t developing an app for Windows Phone as “the other platforms are more important, so he put his developers on those”.

Microsoft spent 8.5 billion dollars buying Skype and intends to lay out over $200 million promoting Windows Phone. Surely there’s a few bucks somewhere in those numbers to pay for a few developers to get Skype functionality on the new platform.

Since writing this, Robert Scoble has issued a correction from the Skype CEO stating a version is being built for the next version of Windows Phone

The fact Microsoft can’t organise this seems to indicate not all senior executives share the vision for Windows Phone. It’s difficult to image Google or Apple having this sort of public dissent on a key product.

Management issues aside, Microsoft’s real problem are they are late to the mobile party and don’t have anything to gain attention.

There’s nothing wrong about being late to the party – Apple were late to enter the MP3 player, smart phone and tablet markets – but in each case they bought something new that changed the sector and eventually gave them leadership of each sector.

With Windows Phone, there’s so far little evidence Microsoft are going to deliver anything radically new to the sector. With Apple’s iOS and Android dominating, it’s going to be a tough slog for Microsoft and they are going to have to have to carefully spend every cent of that big marketing budget.

At least Microsoft’s PR team is doing a great job, the challenge is for the rest of the organisation to sell it as well.

*As an aside, it’s interesting the author of that article about Microsoft’s marketing budgets boasts how he “been sitting on this information for weeks so that Microsoft can make its big announcement at CES this coming week”. It’s good to know where Paul Thurrott thinks his responsibilities lie – certainly not with his readers.

As nebulous and ambiguous as Phone Dog’s claim seems to be it appears some price is being created on the business value of social media users.

To date we’ve seen services like Empire Avenue, Klout and Kred try to measure social media users’ real influence on the different web platforms which in turn allows businesses to allocate some sort of value.

As social media and the web mature, we’ll see businesses spend more time understand where the value lies online.

Each platform is going to have a different value to a business. Depending on the market, one person may be worth more on Twitter than on Facebook and similarly a business may put more value on members of a specific LinkedIn group or industry forum.

What we shouldn’t confuse “value” with is how the services themselves make money. For Facebook, the value comes from the marketing opportunities presented by people sharing their lives while for LinkedIn it’s largely coming from employment related advertising and search.

Other social media platforms are finding other ways to make money and each will have a different attraction to users, businesses and advertisers. All of which will affect their perceived value.

That perceived value is the most important part of social media. If users don’t think a site adds something to their lives, then that service has no value to anyone.

It’s tempting to think that people will object to having a “value” placed on their heads as users, but most folk understand the commercial TV and radio that does pretty much the same thing.

The real question of how much people are prepared to share online will come when they understand the value of the data they are giving the social media platforms. When users start to understand this, they may ask for more service from these companies.

What a Twitter user is worth right now is probably different to what they will be worth this time next year, but there’s no doubt we’ll all have a better idea.

What is fundamentally wrong is quite basic to anyone who has owned or managed a business – money.

The problems at AOL illustrate the deep flaws in the “digital sharecropper” business model of putting free or cheap content on the web to harvest online advertising.

Sites like Demand Media and Huffington Post can’t make money from content if too many staff expect to get paid. Chris Anderson illustrated this best in his rebuttal to Malcolm Gladwell’s review of the book “free” where he examined the economics of his GeekDad blog and the work of its manager, Ken;

So here’s the calculus:

• Wired.com makes good money selling ads on GeekDad (it’s very popular with advertisers)
• Ken gets a nominal retainer, but has also managed to parlay GeekDad into a book deal and a lifelong dream of being a writer
• The other contributors largely write for free, although if one of their posts becomes insanely popular they’ll get a few bucks. None of them are doing it for the money, but instead for the fun, audience and satisfaction of writing about something they love and getting read by a lot of people.

It’s almost touching to picture the modern day digital serf touching his flat cap and murmuring “thank you m’lud” on receiving a ha’penny from the lord of the digital manor before scampering back to working on becoming a well read, but unpaid writer.

The business model of the Geek Dad blog or the Huffington Post relies upon these unpaid writers donating their work and time –the digital sharecroppers as described by Jeff Attwood.

Low or free labour is essential to the success of these site, where the bulk of advertising income goes straight to the proprietors this model allows the digital aristocrats – Lord Chris of Wired or Duchess Arianna – to live well as the owners of these online estates.

The business model falls apart when management starts taking a cut of the profits; install a highly paid CEO and management team with their squadrons of Executive Vice Presidents or Group General Managers with the Medici-esque perks and entitlements these folk demand and the profits disappear.

AOL’s problem is it has too many highly paid managers extracting wealth from the company’s cashflow.

This is exactly the same problem print and television media empires have, once the rich rivers of gold allowed them to build up well paid management castes that are now crippling the businesses as revenues can’t support their financial burden.

Over time, online media revenues are improving. As Morgan Stanley analyst Mary Meeker pointed out in 2010 that U.S. consumers spend 28 percent of their media time online, yet in 2010 only 13 percent of ad spending goes to the Internet. As advertisers follow consumers, publishing on the web will become more profitable.

The risk for big media organisations is their money will run out before the digital renaissance arrives and when it does, they may have squandered their natural advantages by shedding quality journalists, experienced sub-editors and good editors in an effort to prop up executive bonuses.

AOL’s management problem is part of a much bigger problem across markets and industries, we can call it managerialism – there are too many highly paid managers getting in the way of the writers, engineers, scientists, artists and tradesman who add real value to their organisations.

Strangely, it may be Chris Anderson’s “free” model that kills the managerial culture as enterprises that can’t afford to pay the workers that create the organisation’s product certainly won’t be able to pay an Executive Vice President’s bonus.