Media Curmudgeon

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July 24, 2009

Google Is No Bell Labs

Guest blogger Bruce Braun writes:

"If there is one way of describing Google, it would be arrogant. Several years back they announced they were poised to revolutionize traditional media the way they had with Online.

Their acquisitions in print and broadcast were all destined to fail. Agencies hated them because they believed Google had designs on disintermediating the agency/client media buying business model. The implication of Google's traditional media efforts with D-Marc etc, were about as welcomed in radio as a ham at a Jewish picnic. Why Google believed that radio, TV and print outlets would turn over the sale and revenue management to Google is a real mystery.

The only explanation I can arrive at is Google was and still is to a large degree oblivious to how those businesses sell and manage media, the cultures within them. Google was so smart they believed they did not need to hire any experienced experts in those respective fields and or high profile people who could bring credibility to the cause and open doors.

Google buys technology and or people who are technologists. Non-technologists/engineers are viewed as suspect and worst of all, ignorant, compared to the brain trust Google sees themselves as. I find it fascinating that the same insular and "nobody can do what we do" mentality that has been sinking traditional media companies has become so pervasive within Google.

Perhaps when you grow to the size of a Google, at some point along that path being all about invention and innovation morphs into protecting turf and building fiefdoms. Google recently hired Patrick Pichette as the CFO. He comes from Bell Canada and McKinsey. His charge was to get rid of products that were not turning a profit and to improve Google's batting average. Good Luck. I hope this guy remembers or knows about Bell Labs. They had a more loser inventions than successful ones, but it was all about R&D.

It has seemed to me Google's real opportunity with all of that brain power and a big cash machine would be to become an Internet age version of Bell Labs. At its peak, Bell Laboratories was the premier facility of its type, developing a wide range of revolutionary technologies, including radio astronomy, the transistor, the laser, information theory, the UNIX operating system, and the C programming language. Count no less than six Nobel Prizes awarded for work completed at Bell Laboratories.

It also came up with and patented TDMA and CDMA digital cellular telephone technology. Think Verizon & Sprint cellular networks. As we know, AT&T spun off Bell Labs and renamed it Lucent and it then became Alcatel-Lucent. Two years ago, it announced it was pulling out of basic science, material physics, and semiconductor research, and it will instead focus on more immediately "marketable areas including networking, high-speed electronics, wireless networks, nanotechnology and software."

What about pure science and material physics? These are the building blocks of everything else? Google could fill an important void if it put their brilliant minds to it. Inventing the next laser would be more valuable than peddling radio spots!"

Posted by Charles Warner at 8:50 AM | Comments (0) | Print |

July 22, 2009

The Economist Eats the WSJ’s Lunch

Because there is so much information available on the internet free and because more and more people are using the internet as their main source for information, consumers of information content are becoming more discriminating. Interesting, well-written, thoughtful content thrives and boring, poorly written, mindless content gets little or no traction or traffic among educated, discriminating consumers.

And because there is so much information available free, surfing for good content is free and easy and, therefore, it’s easy to break old information consumption habits and to sample new content and switch preferences.

So, in these conditions, what business and economic information content is thriving and what business and economic content isn’t?

Obviously, most business content printed on paper and distributed the old fashioned way via the mail or newsstands is dying. Not only are readers going away, but advertisers are deserting most newspapers and magazines faster than consumers are – with one exception, the Economist.

In June, Folio reported “Economist Group’s Profit Jumps 26 Percent.”

The London-based company, which publishes its namesake magazine, reported approximately $92 mllion in operating profit, up 26 percent over the previous 12-month period. Revenue was up 17 percent to roughly $514.2 million.

The Economist uses a business model that Chris Anderson in his book Free refers to as freemium. In other words, the Economist gives some content on its website away free but charges for full access to all of its magazine online content. If you want to get full online access, you have to subscribe to the print edition, which costs $126.99 a year, for which you get a special world business forecast issue, 20 special reports a year, and a technology quarterly supplement.

Rupert Murdoch’s Wall Street Journal also uses a freemium model. You can get free access to some of its content on the Web, but full access to the same information that is in the daily printed version costs. The WSJ’s pricing model is $1.99 a week ($103.48 a year) for Web only access, $2.29 a week ($119.08 a year) for just the print edition delivered to your home, and $2.69 a week ($139.88 a year) for both the print edition and full access to the website.

The Economist makes a lot of money and the WSJ loses a lot of money, even though they both have a freemium business model for their Web offering. Why? Because the Economist prints and sends in the mail a magazine once a week and the WSJ prints and delivers by hand or sends in the mail a newspaper daily. The WSJ’s costs are a lot higher.

But lower costs are not the main reason the Economist is growing faster; its content is better. And the WSJ’s is getting more boring and less about business under Murdoch.

Mark Potts, who blogs as the Recovering Journalist, writes:

Longtime Journal fans (and I'm one) worry that the paper has moved too far away from the insightful, savvy and even entertaining coverage of the business world that had been its bread and butter for decades. The Journal's day in, day out business reporting—with some very notable exceptions—has become much more pedestrian lately, scrubbed of many of its formerly lovable quirks. That may reflect a recognition that a great deal of good business reporting and analysis is widely available elsewhere on the Web, something that threatens the futures of business-news stalwarts like BusinessWeek (for sale), Fortune (being redesigned and rethought, yet again) and Forbes (in management turmoil). In that context, the Journal is just smartly tacking in another direction.

Still, I miss the Journal's depth and insight into business coverage. It's just not as interesting a read as it was before Murdoch. The formerly wonderful and eclectic Marketplace section has been gutted, for instance, and a lot of the paper's former personality has gone by the wayside. That's what made it valuable and unique, and I daresay it's one of the things that made its much-vaunted online subscription model a success. Subscribers paid for the online (and offline) version of the Journal because there was nothing like it as a source of vital, interesting and readable financial news and information.

The Economist’s content is intelligent, well written, and well researched. And because it’s the best business and economic content on the Web (and in print), it can charge for it (although not quite as much as the WSJ does) and continue to sell ads at high rates because of its desirable audience.

This is a trend – people will pay for excellent, intelligently written, insightful content because it’s now easy to find it on the Web. Discerning people will stray from boring, unremarkable content because news brands don’t mean as much as they used to.

The New York Times has lost its brand for reliable information, except in art, culture, and food, and the Wall Street Journal under Murdoch has lost its brand for insightful, well-written business coverage.

No matter what kind of brand it is (news, information, celebrity gossip, or tech gossip), a brand has to earn its stripes every day in the open, searchable, free environment of the Web. The Times and the WSJ have lost their business information stripes by being inaccurate or boring or irrelevant (or all three).

And the Economist has eaten their lunch.

Posted by Charles Warner at 2:10 PM | Comments (1) | Print |

Bruce Braun at July 23, 2009 2:21 PM writes:

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July 16, 2009

The NY Times Made Me Do It

I wrote a blog titled “MBAs Are ‘…a Menace to Society.’ George Bush and Katherine Weymouth Are MBAs” after I read an article in the New York Times by David Carr titled “A Publisher Stumbles Publicly at The Post.” The first paragraph read: “Katharine Weymouth, the relatively new publisher of The Washington Post, is a lawyer who worked for the company for 12 years and was educated at the Harvard School of Business, so she is hardly a naïf in running a business.”

I used the “fact” that Weymouth had an MBA from the Harvard Business School as a peg for an opinion piece to rail against MBAs, which I like to do from time to time.

A good friend of mine, who used to be a national correspondent for the Washington Post, e-mailed me that Weymouth had gone to law school, not the Harvard Business School. So to double check, I Googled Weymouth and clicked on the Wikipedia entry. Here’s what it said: “Weymouth attended Harvard College, Oxford University, and Stanford Law School.”

How ironic that the nation’s journal of record, America’s first draft of history, the Grey Lady, -- the New York Times -- got it wrong and that the crowd-sourced, open-source, oft-criticized Wikipedia got it right.

It took me quite a while to forgive the Times for running front page stories by Judith Miller about WMDs in Iraq and for endorsing Hillary for the February2007, New York primary, but I eventually forgave it and went back to relying on the Grey Lady for my first morning news fix because I believed the Times website was by far the best news website on the internet. I liked the wide variety of blogs, the columnists, especially the incomparable Frank Rich, and some of the features like Blogging Heads.

But now, I can’t forgive the Times. I trusted it and it not only let me down once again, but it also made me look stupid and ill informed. And I don’t need any help in that realm, thank you. Bloggers and blogs are supposed to be unreliable. The cry of old-line media defenders is that we must preserve journalism and crusty journalism institutions such as the venerable Times.

How can we live in a world where Wikipedia is right and the Times is wrong? I think I just found out. We can, and very nicely, thank you.

Not only is the Times’ reporting sloppy, but also on Wednesday, July 15, its website front page was disgusting – it had an ad that showed a revolting picture of the back of a person with shingles. The Times home page used to be the default home page on my browser, so I go there six or sever times a day.

I couldn’t believe that the Times took such a gross ad. Late Wednesday morning, Advertising Age MediaWorks featured a story in its daily e-mail alert titled “NYTimes Has a Blistering Rash,” which read: “Ad Doesn’t Go Well With Morning Coffee. Even the Times isn’t immune to the kind of online ads that give online ads a bad name.”

After I read the Ad Age story, I went to the Times website and the ad was still up. I was curious what company would run such a stupid ad. It was Merck – the same wonderful company that sold us Vioxx. And the product was Zostavax, a “vaccine that can help prevent shingles in adults 60 years of age or older. You should not get ZOSTAVAX if you are allergic to any of its ingredients, including gelatin or neomycin, have a weakened immune system, take high does of steroids, or are pregnant or plan to become pregnant.”

In other words, the vast majority of .Times readers (people over 60 and young women) shouldn’t even consider taking this new vaccine. And those who could consider the medicine were certainly repulsed by the ad and wouldn’t click on it to find out what they drug was.

You’d think the .Times would know better, but the message it gave website readers was, “We’re so desperate for revenue, we’ll take anything.” Can we expect penis enlargement ads next?

And you’d think Merck would want to clean up its image after Vioxx, but the message it gave potential customers is, “Don’t click on this ad; it’ll gross you out more.”

A study on negative advertising done a Harvard several years ago showed that negative ads don’t work. The research was done on drug and alcohol abuse ads (remember the anti-drug ad showing a gun jammed up a nostril with the headline “Cocaine Kills?”) . The study showed that such ads don’t work because people with abuse problems are in denial and don’t think it applies to them. If you want run helpful ads, they should be positive – show the benefits of wellness.

But what would you expect from those wonderful people who brought us Jonathan Blair and Judith Miller’s “stories” and from the people who brought us Vioxx?

One final note about Merck. Best-selling author Jim Collins’ new book, How The Mighty Fall sites Merck as a great company that fell into a death spiral. To me, Merck running the Zostavax ad confirms Collins’ judgment.

And we all know that the Times has under consideration charging online readers for its content. So putting up a revolting ad while it is contemplating charging people to see such ads makes the Times business operation even dumber than I imagined.

But I guess a news organization that doesn’t care enough to check the facts about a major newspaper publisher’s education wouldn’t care much about its readers' sensibilities either. It’s sad that it’s come to this, but it has.

Posted by Charles Warner at 2:34 PM | Comments (0) | Print |

July 15, 2009

Clash of Titans: Anderson Vs. Gladwell

The blogesphere has been abuzz about best-selling author Malcolm Gladwell’s review in the New Yorker of best-selling author Chris Anderson’s new book Free: The Future of a Radical Price. Gladwell did not genuflect to Anderson’s book as blogger Seth Godin and other internet gurus did.

Janet Maslin in the New York Times also gave Free a tepid review, but no one in the blogesphere or anyone who has more than an passing acquaintance with the internet pays any attention to what the Times says about the Web. How can the Times assign someone who knows nothing about either topic to review a book about the Web and the new economy it’s creating? Maslin’s review was so inconsequential, ill informed, and ill conceived that it’s obvious that the Times is in stage two – anger (stage one is denial) – of the five stages of grief, as described by Anderson in Free.

The Times must be furious at Anderson for suggesting that all content will eventually be free and reminding his readers that the free Craigslist killed newspapers’ lucrative classifieds business. The people at the Times want to dismiss anything that reminds them that it is a “dinosaur blog,” as one of my favorite cartoons called newspapers.

But enough about the feckless Maslin review; the review that’s causing the buzz is Gladwell’s.

On the surface, Gladwell’s review seems to be a thorough, thoughtful review – way too thorough. You’d be much better off investing a little more time and reading the book rather than Gladwell’s biased review. And the book is worth reading or listening to – Anderson reads it, just as Gladwell reads his books, although I think Anderson is a better reader.

In fact, anyone interested in doing business on the Web or competing with a business that’s on the Web (in other words, everyone in business) should read Free because it’s packed with new, useful, realistic ideas about radical new pricing models created by the digital revolution and the virtually free distribution, processing, and bandwidth costs that now exist because of Web-driven technological advances.

After reading Gladwell’s review several times (which, to Anderson’s point and ironically, is free on the New Yorker’s website), I got the distinct impression that Gladwell was being a little pissingly jealous and piqued. Here, for me, is the most telling quote from the review:

His advice is pithy, his tone uncompromising, and his subject matter perfectly timed for a moment when old-line content providers are desperate for answers. That said, it is not entirely clear what distinction is being marked between “paying people to get other people to write” and paying people to write. If you can afford to pay someone to get other people to write, why can’t you pay people to write? It would be nice to know, as well, just how a business goes about reorganizing itself around getting people to work for “non-monetary rewards.” Does he mean that the New York Times should be staffed by volunteers, like Meals on Wheels?

In other words, Gladwell, as clever a writer as he is, hates the idea that anyone would write without getting paid. It’s a trend he can’t bear to think about. He has to diss the research about and certainty of the trend toward free because it could knock him out of a top tax bracket. Writing for free is anathema to him.

Therefore, I am anathema to him.

I do not get paid for blogging – on my own blog, on Jack Myers Media Biz Bloggers, and on The Huffington Post. On my own blog I do not accept any advertising, even automated Google AdSense links, because I do not want to be perceived as advertising having any influence on what I write. I hope Jack Myers and The Huffington Post sell lots of ads and make lots of money so they can continue to distribute my blog posts free. I write because I like to get my opinions out into the public sphere, to start a conversation on issues I think are important, and to enhance my reputation.

Furthermore, here’s Gladwell’s last line in the review: “The only iron law here is the one too obvious to write a book about, which is that the digital age has so transformed the ways in which things are made and sold that there are no iron laws.” Gladwell, with his head firmly planted in the sand, doesn’t want to believe there are any iron laws, but the pragmatic Anderson does.

Anil Dash writes a blog, and he got into Anderson-Gladwell brawl with the most insightful comment I have read on the subject: “Whenever I see somebody getting their dander up, I think of one of the first things I ever blogged about ten years ago: We hate most in others that which we fail to see in ourselves. Ah hah!”

About a week before Free was officially published, Chris Anderson had a Tweet with the tiny URL included where you could download an audio version of the book free. He later Tweeted with the URL where you could get the book free online. Obviously, he had to offer the book free in several versions, which, of course would upset Gladwell. He sells his books.

But because I like hard copies of books that I am considering using in one of the college courses I teach, I ordered Free from Amazon.com ($16.99, not $26.99, the price Gladwell quoted in his review – I’ll bet because he didn’t want people to know they could get it cheaper on Amazon.com). I could have purchased Anderson’s The Long Tail along with Free for $26.50 and received free shipping, but I already have a copy of The Long Tail, which I have as required reading in a course. So now I will require two of Anderson’s books in at least two of the courses I teach and none of Gladwell’s, although I do have Blink and Outliers on the recommended reading list in one of my graduate courses.

To my surprise and delight, I not only received the copy of Free that I ordered, but another box with four copies of Free, four large mailing envelopes, four UPS pre-paid mailing labels, and a personal note from Chris Anderson asking me to send the book free to four people in order to spread the word. Anderson obviously walks the free walk and because of that he won my support and gratitude.

As Anderson understands and writes about, the DNA-coded compulsion for reciprocity is so strong in human beings that I will somehow find a way to reciprocate and bring him more fame, credibility, reputation, and, perhaps, money someday. I will do nothing for Gladwell. What has he done for me?

As Dan Ariely points out in his brilliant book Predictably Irrational, because Anderson gave me his book free – he gave me a gift, as it were – he established a social relationship with me, which is much more powerful and long lasting than the market relationship I have with Gladwell. I bought Gladwell’s three books and, thus, have no relationship with him except an impersonal, money-oriented market relationship. So when he wrote a negative review of a book by an author with whom I have a social relationship, I’m upset with Gladwell and will not be tolerant of his review, which like his books, are based on an understanding of the realities of the past, the old, economy, not on an understanding of the new economy.

But I will be tolerant and agree with the positive, knowledgeable review given to Free by Jeremy Phillips in the Wall Street Journal. Phillips knows what he’s writing about; he’s executive vice president of News Corp., which owns the Wall Street Journal.

The Journal is not free and charges for complete online access to its content, so it obviously doesn’t buy into all of Anderson’s arguments for the free model. But unlike the New York Times and the New Yorker, its journalistic standards are high enough to take an objective look at a significant contribution to our knowledge of the new economy and assign someone both unbiased and knowledgeable about the subject to write a review of Free.

Read it or listen to it. Anderson’s book is full of radical yet practical ideas. Gladwell’s review is simply full of it.

Posted by Charles Warner at 4:38 PM | Comments (0) | Print |

July 8, 2009

MBAs Are “…a Menace to Society.” George Bush and Katherine Weymouth Are MBAs

In his 2004 book, Managers Not MBAs: A Hard Look at the Soft Practice of Managing and Management Development, Henry Mintzberg wrote “MBA graduates who believe they can manage anything are quite simply a menace to society.” Is it a coincidence that George Bush and Katherine Weymouth both have MBAs from the Harvard School of Business?

Bush was the first U.S. president with an MBA. He lied to the American public about WMD in Iraq in order to promote a personal vendetta against Saddam Hussein. As the entitled son of a privileged, powerful family, he had a pattern of believing he never did anything wrong (see Justin Frank’s Bush on the Couch).

Weymouth is the first publisher of the Washington Post who has an MBA. According to the New York Times her paper promoted corporate sponsorships:

[For] a fee of $25,000 for one, or $250,000 for an entire series for an exclusive “Washington Post salon” at Ms. Weymouth’s home in which officials from Congress and the administration, lobbyists and, yes, the paper’s own reporters could have a quiet, off-the-record dinner, discussions to be led by Marcus Brauchli, the newspaper’s editor. Theoretically, you can’t buy Washington Post reporters, but you can rent them.

As an entitled daughter of a privileged, powerful family, Weymouth, like Bush, did not earn her job on merit, but got it because she is a member of the Luck Sperm Club – she is the granddaughter of Katherine Graham, whose family controls the Washington Post.

Is it a random occurrence that both Bush and Weymouth come from privileged backgrounds, didn’t really earn their jobs on their own merits, and have MBAs from the Harvard Business School? I don’t think so.

Mintzberg writes that “MBA programs by their very nature attract many of the wrong people – too impatient, too analytical, and too much need to control.” He also writes that most MBA programs teach about analyzing numbers, not managing people, and that by concentrating on the numbers and on the concept of maximizing shareholder value, graduates arrogantly believe they can manage any business. (Jim Collins in his new book How the Mighty Fall refers to short-term investors as “shareflippers,” a term I like for the current breed of greedy Wall Street types.)

Weymouth worked at the Post for 12 years before she became publisher. But during that time she either didn’t fully understand the importance of the separation between church and state for a newspaper or didn’t know that the marketing department was sending out a flier promoting a deal that had only been considered but not approved. In ether case she should have known better before she damaged her paper’s reputation and had to publish an apology to readers.

It almost seems that Weymouth, like Bush, arrogantly believed she could do no wrong, which likely comes from a sense of entitlement after getting a job she didn’t earn and, of more concern, from what she learned in her MBA program – think of your own needs first (to demonstrate how successful and smart you are), not about the core values of your organization (journalism ethics), and not about customers (readers).

It’s probably not fair to blame the Harvard MBA program for the moral and ethical lapses of Bush, Weymouth, and greedy Wall Street bankers who are graduates, but it seems to me to be fair to ask the question, “what values are MBA program’s like Harvard’s teaching?”

And, to its credit, the Harvard Business School is asking itself that question. Several months ago it hosted an open conversation on the subject on its website. We can only hope that Harvard and other MBA programs take a look at themselves and see what they can do to stop turning out graduates who, like Henry Mintzberg said, “are quite simply a menace to society.”

Posted by Charles Warner at 10:21 AM | Comments (1) | Print |

Bruce Braun at July 8, 2009 2:53 PM writes:

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