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Ross Fadner, Thursday, October 26, 2006, 11:45 AM
Digg.com In Acquisition Talks
TechCrunch
If Michael Arrington says it's so, it really might be. The man who broke the Google-YouTube news is now saying San Francisco startup Digg.com is holding acquisition discussions with a number of companies, including News Corp.
Arrington is quick to point out that these are rumors--and rumor has it that Kevin Rose and company want at least $150 million for the community article tagging site, in which users tag or "digg" articles they deem awesome enough to be read by everyone worldwide. The idea is to let the people tell you which news is best, in a number of different categories.
Arrington says the acquisition talks are unlikely to come to anything, as Digg's founders would rather retain control. Rumors of the upcoming Series B financing--possibly $5 million from Greylock Partners--led News Corp. and others to initiate discussions with Digg.
Talks have stalled, Arrington says, partly because of a traffic measurement dispute with ComScore. And it's a big one: Digg says it has 20 million uniques, while ComScore reports just 1.3 million in its September report, along with flat growth since August. As Arrington points out: "These numbers are for U.S. households only. Comscore is almost certainly significantly under-reporting Digg traffic."
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Report: The Black And White Is Going Red All Over
Editor and Publisher
The online ad business isn't everything newspaper publishers want it to be. A new Merrill Lynch report indicates that many print outfits will fall by the wayside, as the world gets more of its news on the Web.
"Even if the rapid [online] growth continues for the next few years, we don't see online representing over 50% of newspaper ad revenues for at least a couple of decades, suggesting that industry profit could stay flat for the foreseeable future," analyst Lauren Rich Fine wrote in a research note.
Fine projected that online revenue growth will stay in the double-digits through 2012, eventually slowing to 5 percent, while print advertising will decline 1.5 percent annually. That translates to flat-to-slightly-down cash flow for the next 20 years.
That means big publishers will have to shed depreciating assets to stay afloat, and smaller publications may die. Some publishers may abandon paper altogether, and consolidate their newsrooms while still offering local coverage in certain areas.
"We are fearful the recovery coming out of the current downturn could be even more muted as online continues to transform the newspaper's most lucrative, and most cyclical category: classifieds," wrote Fine.
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History Says Google's Dominance Won't Last
Ad Age
If you take a look at the history of media, Google's dominance isn't so extraordinary. Think TV. NBC, which along with CBS controlled 85% of the airwaves, was ordered by the Federal Communications Commission to sell one of its two broadcast networks, which became ABC. After that, the three networks reigned until News Corp. came along with Fox. Then cable made it possible for more players to enter the TV game. And of course, earlier this decade, cable surpassed broadcast in both ad revenue and prime-time ratings.
Google's "dominance" is estimated to be 25 percent of total online ad revenue this year. Let's be clear: Google dominates one facet of Internet advertising--text-based search and contextual, the accelerated growth of which is unsustainable forever.
Even in search, is it possible for Google to maintain its dominance? Net history says no. Microsoft's Internet Explorer eventually crushed Netscape; Yahoo eclipsed AOL as a portal, and then tried to move into search, eventually losing out to Google. Now, Yahoo is losing out on ad revenue as social networks and other content providers rise. What does any of this have to do with Google? Maybe nothing. But time shows that history tends to repeat itself.
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Brand-Building Through The Blog Community
Ad Age
Without a doubt, community-building has become the brand strategy of the year. Thanks to the MySpace revolution, traditional media companies, which used to be terrified of leaving their brands vulnerable to scrutiny, are now letting users interact with the writers and producers of their favorite shows.
For example, ABC's hit show "Grey's Anatomy" now has a hit blog, "Grey Matter," where writers interact with their hardcore fans. In a recent post, Allan Heinberg, a new writer for the series this season, wrote to fans: "...the way you write about the show, debate it, love and/or hate it carries an enormous amount of weight in the writers' room." That message endeared Heinberg to the show's faithful.
There's no doubt about it--feedback and word of mouth will continue to play a larger role than ever before in the way media is created and consumed. You can't be afraid of your audience, and you definitely can't be afraid of what they have to say about your brand. Otherwise, they'll sense you're not proud enough of what you represent to let it stand alone.
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MySpace, Facebook Lose Traffic, Users
The Wall Street Journal (subscription required)
Both MySpace and Facebook, the Web's largest social networks, lost traffic in September, according to data from Web measurement service Nielsen//NetRatings. The total number of unique visitors to MySpace fell 4% to 47.2 million from 49.2 million in August--while Facebook's traffic fell three times harder to 7.8 million from 8.9 million, or 12%.
Nielsen analyst Charles Buchwalter attributes the slowdown in traffic to seasonality, saying both sites lost visitors as students went back to school last year. Isn't Facebook supposed to be for students?
Facebook countered by claiming that the total number of registered users rose 9%, and that individual page views actually rose 40% in the same period. MySpace, on the other hand, admitted a slowdown.
Are kids getting sick of MySpace and Facebook? It may be way too soon to say. It would be more troublesome if the rate of member deletions were rising--something MySpace flatly denies.
But there is a spam problem on MySpace that's beginning to annoy some users. Some advertisers are taking advantage of the "friend request" function to send out automated, mass unsolicited notices to users. Many of these friend solicitations bring users to porn sites looking to add new members. Several users have killed their profiles in response. On Facebook, some users are defecting because the site decided to open its doors to anyone.
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