Thursday, November 10, 2005

More on Googlebase and Automat

I feel like the modern day equivalent of Paul Revere riding through the newspaper industry yelling "Googlebase is coming, Googlebase is coming!" Googlebase is going to hit the newspaper-based classified ads hard. Revenue from newspaper classified ads has already been hard hit by Craigslist and eBay. Google’s forthcoming Googlebase will kick it up a notch.

Just about any search you do on Google these days results in an ad for eBay. In fact, I just tested this by searching for "dog crap" and yes there was an eBay ad. Man they sell everything at eBay. Anyway the forthcoming "patent pending" Automat from Google will place the Googlebase ads next to the AdWords ads integrated right into users' search results.

As I mentioned in my previous article on Googlebase, its real advantage is in providing structured forms for various types of goods to ensure: (a) more complete information on items/services for sale; (b) the ability to find exactly what you want and filter out the junk, since you can search by field. This will further decimate newspapers' classified revenue.

What can newspapers do about this? Well there are three options: (1) Throw in the towel on classifieds and simply milk that cow dry; (2) Jump in bed with LiveDeal; (3) Launch your own Googlebase with a classified ad solution we will be releasing soon. You can see an almost complete implementation at the mapping of ads will be added within days.

The LiveDeal option is tempting. This has no upfront costs and you get a branded site pre-populated with content. The downside is that your ads are pooled with everyone else. So if you spend $10M promoting your site and building up ads, I can open one just down the street for free and have all of the same ads. In essence you aren't building your own base of advertisers, you are building LiveDeal's base of advertisers. Then there is some revenue sharing for all of the money you generate through your traffic. This isn't too different from receiving affiliate revenue from sending your customers to eBay. But, I’m sure that this will do well for LiveDeal, because the quick jumpstart is tempting.

Our classifieds provide more structure, like Googlebase. There are specialty forms for every subcategory just like the forthcoming Googlebase (see description of the benefits above). We provide a mapping of all ads too, which Googlebase will probably have or add shortly after launch. But the benefit of our solution is that you own it. You can do whatever you want with it. You get the source code and you can make changes or we can. For example, we are also adding scraping to go out and spider websites to pull in ads. Maybe we'll scrape Googlebase once it goes live.

If you run a media property and see the tsunami of Googlebase on the horizon following the pounding you've already received from Craigslist and eBay, you might want to jumpstart your online classifieds. LiveDeal and ZiXXo are your best options, consider them carefully.

Tags: Googlebase Automat Classifieds Classified Ads Newspaper

Monday, November 07, 2005

Is Knight Ridder the First Domino?

In the time since I wrote Plotting a Course for Newspapers (Part 1), there have been a few moves that have sent shockwaves through the Newspaper publishing world. I’m referring to major investors Private Capital Management, Harris Associates and Southeastern Asset Management calling for Knight Ridder to be sold. In explaining their rationale, they point to “limited revenue growth across the newspaper industry”. This indicates that Knight Ridder is the first, but probably not the last newspaper company to face such pressure. Knight Ridder has responded by hiring Goldman Sachs to explore a possible sale.

I have followed the travails (including declining circulation) of the newspaper industry in this blog for some time now, so this clearly comes as no surprise. Knight Ridder owns 84 newspapers (31 dailies and 53 non-dailies). I doubt that the new media barons (Google, Yahoo, MSN, AOL) are interested in shelling out $6B to buy KRI, only to cannibalize the papers with their online offerings, but who knows.

Alternately, the company could be broken into pieces and sold, but that doesn’t solve the underlying problem. What can newspapers do to retain relevance in an increasingly Internet-age?

I don't know who will buy KRI, but since the entire newspaper industry is suffering from lack of revenue growth, is KRI the lead domino that will set-off a chain reaction?

Wednesday, November 02, 2005

Windows Live vs. the Web OS

In a previous post titled The Web OS vs. The Desktop OS, I talked about how Microsoft was moving to evolve desktop applications by extending their functionality into the web, while the web companies (Google et al.) are evolving web application by leveraging client side functionality via technologies like AJAX.

Now Microsoft’s shows their hand in this battle for dominance of what I believe is a “hybrid platform”. It is a hybrid between the desktop and the web. If users want to edit their documents locally and then integrate that with group editing, sharing, etc. via the web, then Microsoft wins. If users want to do everything on the web, with a responsive user interface via AJAX, then the web guys win.

With Ray Ozzie as the CTO (his background being Notes and other collaboration tools), there is no question that collaboration will be increasingly built into everything Microsoft does.

Given the installed base and learning curve invested in the feature-packed Office applications, it will be hard for companies to pry users away from their desktop applications. I believe that email is a different beast because it is inherently network-centric.

Windows provides the tools to extend the functionality of their core system by building gadgets. Again, Microsoft is going for a platform play, trying to get developers to build gadgets that extend their core functionality. The old embrace and extend play directly from the tried-and-true Microsoft playbook.

On the other hand, we are finding more and more value from collaboration, social networking, etc. Do these AJAX-powered network applications provide sufficient value to usurp the network-aware desktop applications? My guess would be that a few applications will shift toward online apps, like email and calendaring, but the rest of the Office suite will continue to dominate with their growing network-aware capabilities.