Oct 192014
 
social media services like facebook have fan pages

The story of Whisper and the betrayal of its users continues to roll on, but the real problem is the way social media services are desperately trying to recreate the dead business model of print advertising.

Whisper’s problems with The Guardian continue as the company tries to salvage its reputation but the irony for the service is that it was trying to shoehorn its business to fit the print publishing model that the internet started to erode twenty years ago.

It’s not just Whisper; almost every social media business from Facebook to Twitter wants to be an advertiser funded publishing company, just like the newspapers of thirty years ago.

A few weeks ago I wrote about LinkedIn’s pretensions of becoming a publishing platform and this week Forbes tells of Pinterest’s adventures at the Cannes advertising festival as it sells its marketing services.

Every social media service has some sort of angle that harks back to the golden age of newspaper publishing where print advertising was a deep river of gold. Most of them want to become publishers themselves.

It would be hard to think of a service less suited to being a media company than Whisper; but then there’s Yelp whose main business of reviewing eating houses and bars seems to be totally at odds with newspapers of yore.

On the Salesforce PayPal Media panel last week, Yelp! Founder Jeremy Stoppelman was asked if he saw the restaurant review site as being a media company, his response was “sure, it’s a blogging platform.”

So we have new media aping the old media business models where these platforms try to lock users into information silos; in the same way that a London Times reader would never buy the Sun.

The problem with that is the internet broke down the geographic barriers and today a Sun reader in London can just easily find celebrity gossip on TMZ and the broadsheet reader might find more thoughtful analysis in the New York Times.

Certainly someone browsing the web for restaurant reviews might find a better site than Yelp while a bride researching wedding dresses could just as easily find ideas on Facebook as much as Pinterest.

In reality, social media sites have nothing of the stickiness of the old fashioned newspapers in the days before the internet.

Of the social media services it might be that Facebook is the best placed to succeed as an old media publishing service with its advertising smarts pushing messages to its diverse and deep user base but that isn’t certain given the widespread user dissatisfaction with its news feed.

For the social media services much of the problem – -particularly for Facebook – lies in their contradictory aims; they are trying to be identity services, buying platforms, publishing services and advertisers.

For publishers that balance between content and advertising was always a delicate one; and one that shifted over time. For online services that balance is far more complex and the future far less certain.

One thing that is clear Is those contradictory aims aren’t going to be easy to reconcile and the quandary may prove to be insurmountable.

What’s clear though are the advertising models of the future are still waiting for a David Sarnoff moment.

Sep 232014
 
jeff-weiner-linkedin-ceo

LinkedIn CEO Jeff Weiner believes the company’s culture and values are one of its most important competitive advantages, however moving into China has tested those strengths he told a conference in Sydney two weeks ago.

During the fireside chat Weiner went over the company’s development, the challenges he faced taking over from LinkedIn founder Reid Hoffman as CEO and the importance of the company’s ethical base.

“It’s important for companies to define what culture and values mean to them before they get to what the specific values and culture are,” Weiner said in an answer to an audience question.

Defining values and culture

“At LinkedIn we think culture is the collective personality of our organisation and it’s not only who we are but who we aspire to be and that aspirational component is really important,” Weiner continued.

“Oftentimes you’ll see company executives get onstage to introduce culture and values or talk about changing  culture and values and it’s not necessarily something the company already does and it loses the trust of the employees and the audience when that material being presented because people know is not necessarily true.

“If you allow yourself to include this aspirational dimension when defining the culture it gives everyone an opportunity to play up to where your setting that bar and I think that’s important,” stated Weiner.

“Values are the first principles upon which we make day to day operating decisions, that’s how we make the distinction.”

Culture as a competitive advantage

“I think once an organisation has defined for itself what it means by culture and values it’s then obviously important to codify its culture and the pillars of the culture and the specific values that it operates with.

“Its not enough to codify it, we went to the trouble of defining it and then putting it in our public registration when we filed to go public and that’s a good start but all too often we see people talking the talk with regard to culture and values and not walking the walk.”

For Weiner, that commitment to the company’s culture is the company’s strength in the marketplace: “Today, I’ll tell you it’s our most important competitive advantage.”

The China Problem

LinkedIn’s culture though has been tested by its entry into the Chinese market where its aspirations of being a content publisher met the limitations of the country’s censors.

When asked by this writer about the quandary LinkedIn finds itself in the PRC, Weiner reconciled this with the company’s mission to connect the world’s professionals.

“China’s one of our largest opportunities in terms of the value we can create for members in China and for companies in China.”

“One in five knowledge workers and students reside in China so it’s a huge part of connecting the world’s professionals and to achieve that kind of scale so we can create value for people who are living in China it’s important that we’re able to do business there.”

“At times means complying with law that forces us to do things that are very challenging and difficult and we always knew the importance of operating in China and for us we wanted to be extremely thoughtful in terms of how we did that.”

Favoring freedom of expression

“Obviously we are very much against the idea of censorship and very much in favor of freedom of expression but in terms of operating there and creating economic opportunities for what could be potentially a 144 million people from time to time we may have to make some very difficult decisions. That’s the reality of doing business there.”

In being asked if this creates a struggle with the company’s culture, Weiner answered “that was one of the things we took so much time on.”

“From the time we decided we needed to be in China and how important it would be in creating the global platform and adding value for members and the time we entered into China with the local language version of the site it was of the order of 18 to 24 months.”

“Discussions took place among our executives asking some very difficult questions in terms of our culture, our values and where we would be willing to compromise and where we would draw hard and fast lines and that will continue to be an ongoing process.”

For LinkedIn and Jeff Weiner the challenge of being a trusted global publishing platform and a leader in the Chinese market raises some serious ethical questions; it’s a challenge that is going to test the company more in coming years.

Sep 162014
 
mojang-and-the-x-box-one

Yesterday Microsoft confirmed the rumours that it would buy Minecraft developer Mojang for 2.5 billion dollars.

Following the announcement, Mojang founder Markus Persson — aka Notch — wrote a touching blog post on his leaving the company he founded.

The business had become too big and the demands of Minecraft’s legion of fans were taking their toll; it was time for Persson to move on to keep his sanity.

“If I ever accidentally make something that seems to gain traction, I’ll probably abandon it immediately.”

For all the hubris we hear from technology company founders and CEOs, it’s those like Persson who probably will end up making the most difference to the world.

 

Sep 112014
 
what do we share on social media sites

“LinkedIn is the world’s biggest publishing platform,” states Olivier Legrand.

Legrand, LinkedIn’s Head of Marketing Solutions for Asia Pacific & Japan, was speaking at the company’s Connectin Sydney conference where the service was demonstrating its credentials as a marketing and advertising service to Australia’s largest corporations.

The view that LinkedIn is a publishing platform is problematic for content creators — it creates a conflict for those using the service to distribute or publicise their work and again it shows social media services are not your friends.

It’s understandable LinkedIn wants to get corporate advertisers on board seeing the business’ stock currently trades at eighty-four times revenue, however a focus on becoming an advertising driven media company at a time when advertising driven media companies are heading the way of the wooly mammoth seems to be a risky strategy.

Another risk for LinkedIn as a publishing platform is that user generated services can, and will be, gamed resulting in a dramatic decline in quality and value in the site.

Every social media service now sees itself as a media company and it may turn out they are correct, however that future of publishing will be very different from last century’s newspaper and broadcast models they are trying to emulate.

Even if the dreams of social media services do come true, the advertising driven media industry, an the publishing world, will be very different to the world they hope to be part of.

Sep 082014
 
old-typewriters

This post is the final of a series of four sponsored stories brought to you by Nuffnang.

Boring is the comment often used about business websites, however smart companies are using blogs to spice up their sites and boost marketing, customer retention and employee engagement.

A blog can make a company’s website more dynamic and a destination for visitors, it’s an opportunity for an organisation to demonstrate its depth of expertise and the qualification of its staff.

Best at this are the big global companies like GE, Cisco and IBM that have large pools of experts who can contribute to the company blog. These enterprise blogs are sprawling sites that cover multiple markets and industries which the companies operate across.

More than a marketing tool

For smaller tech companies, particularly Silicon Valley startups, their blogs have become vital marketing platforms where they often describe the company’s journey and new features being added.

Some companies, like Uber and Nest, use the company blog as their press channels with entries acting as media releases. This is particularly useful for smaller businesses without a PR agency or in house communications people.

At a more tactical level, blogs can be used as a weapon in a fight for marketshare. One of the toughest battles on the internet at the moment is going on between accounting software companies MYOB and Xero and their blogs are at the forefront of this fight.

In this battle MYOB are the incumbent with over a million users in the Australian business accounting market and a small army of Certified Consultants to help clients with using the software while Xero is the well funded cloud computing service that grew its Australian customer base by nearly 50% to 147,000 so far this year.

Small business thought leadership

So the battle is intense with both companies using their blogs to show their thought leadership in the small business space. Both of the blogs illustrate each company’s strengths and weaknesses.

MYOB’s blog is the longest standing and is more of a generalist overview of small business and accounting issues while Xero’s focuses on the new features being added to the product, both have fiercely passionate followers which shows in the comments fields of their blogs.

Blogs though need not be about pure marketing or advertising functions, in fact the best small business ones are those that just tell their customers what’s on. These are particularly good for the hospitality and retail industries.

One plus with business blogs is they help employees understand their business better, particularly when staff are invited to contribute.

Blogging isn’t just about lonely geeks or bored mums sitting in their spare rooms. A well thought out business blog can be a great tool for engaging existing customers, motivating staff and building new markets.

Jul 302013
 
google_maps_coordinate

What would you do if your entire suburb, town or district vanished off the map? That’s the problem the villagers on the Scottish isle of Jura have had to face after Google wiped them off the map

The good humour of the locals about their predicament shines through the story, although the British and Scottish governments are less than impressed.

Particularly noteworthy is how the island’s distillery dealt with vanishing off the map – Jura’s whisky is quite distinctive for those who’ve tried it – came up with a great idea for a Twitter campaign to promote their brand.

Kira’s residents show just how important initiative and resilience is for business people, it’s a lesson we should all keep in mind the next time you hear an executive or interest group whingeing that the government needs to do something.

Jun 092013
 
Fairfax give The Age away to boost circulation figures

Yesterday I had lunch with a group of retirees who aren’t particularly connected to technology. It was a contrast to the previous three days spent with startup and media companies talking about social media and the internet.

One thing that really seemed to disturb them was the idea that printed daily newspapers may not be around in a few years time.

Which makes Elizabeth Knight’s Media Rivals Facing a Brave New World this weekend a timely read in the contrasting strategies of News Limited and Fairfax.

From Knight’s report it’s hard not think News Corp CEO Robert Thomson is deluded;

”Print is still a particularly powerful medium … 43 per cent of Wall Street Journal readers are millionaires.”

Old millionaires. Like the people I had lunch with yesterday.

The problem Thomson has if this is indeed the strategy of the New News Corporation then he’s locked into a dying, declining market.

A bright spot for both News and Fairfax are the digital properties that evolved out of their old classified and display newspaper advertising, specifically the real estate sites Domain and realestate.com.au.

These sites don’t involve substantive news reporting or journalism beyond regurgitated realtor media releases, although if you take the attitude that newspapers were really only advertising channels with some news to attract an audience then this is a natural development.

For journalists, and those who want to be informed about the world around them, that view is a problem as it doesn’t answer the question of how do you pay for news.

With earnings expected to be 30% lower this year compared to 2012, this is something concentrating the minds of Fairfax’s management given they don’t have the profitable Pay-TV revenues of News.

The problem for the legacy news operations is that the focus is on cost cutting while denying the reality that expensive printed newspapers are dying in both readership and advertising revenue.

Desperately hanging onto the daily printed newspaper model threatens to consume resources needed make both Fairfax and News successful online.

Which makes the venues of the investor events that Knight describes a interesting counterpoint to the ruthless cost cutting going on at both News and Fairfax.

Sydney’s Mint and the Four Seasons Hotel are lovely venues and no doubt the executives and analysts enjoyed some nice canapes and drinks after their briefings.

But genuinely cost conscious management would have put their status to one side and held the meeting at their own premises and, if the analysts were nice, offered them a cup of tea and a biscuit, just like shareholders get.

At time when fast, responsive and small management is needed to make fast decisions in rapidly changing markets it seems the companies most threatened by change are those with the most inflexible, and entitled, managements.

It may well be that Fairfax or News discover the magic formula that makes digital media profitable, but it’s not going to happen while they deny the realities of today’s market places and a radically changing economy.

Not that this will worry the older executives of over-managed businesses who will spend their sunny days of retirement enjoying nice lunches and wondering what happened to the days of the printed newspaper.