• by sondra , Jarvis Coffin , July 9, 2007

Many teachable moments have occurred in the short life of the Internet advertising business since 1995.

One obvious one is the dot-com bust of 2000 from which we learned that new media is a journey (a lesson learned by cable TV) and that business fundamentals are relevant to survival on the trail.

Other moments, such as the retreat of push technology, the advance of privacy legislation and the introduction of spyware, pop-up and spam blockers, taught us that the online user is the customer, and that the customer is in charge.

The careful dismantling of AOL's "garden wall" and the rise of Napster and craigslist instructed us that while information may be proprietary, it does not guarantee privilege.

Today 's teachable moment has a name, Terry Semel, and it is the most recent in a series of lessons describing the future of online media as dependent on the ability to create content and audience networks.

Thus, Google paid $3.1 billion for DoubleClick, Microsoft paid $6 billion for aQuantive, Yahoo paid $680 million for Right Media and WPP paid $649 million for 24/7 Real Media.

These moments are connected, adding up to the knowledge that success as a media company in the consumer-driven, fragmented media world of the future requires different skills and vision than you get from the "hits" business model of Hollywood and television.

As an object lesson, Semel is neither a scapegoat, nor demon. He was hired six years ago to build a portal that would gather loyal users to it and trump competitors with its size and substantial breadth of content. He did that job.

Today, Yahoo is certainly large and its content and content partnerships are substantial, attracting users and trumping other large and substantial Web sites.

Unfortunately for all of them, they are not large or substantial enough to make more than a gentle lapping sound by the time their waves reach the shores of Internet user desktops the world over.

Therein lays the online problem for an advertising and media culture reared on big fish and small ponds: it's not about splash, it's about ripple effect.

Google's AdSense program got the jump on ripple effect with its zillions of text boxes. The model was a success making money by using the Internet the way people use the Internet, fanning out in search of stuff they need and want to know, sometimes in only bite-size pieces.

Paid search and companion text boxes scaled beautifully and effortlessly by going with the flow of the market. Behind them, you could practically hear the sound of the portals groaning under their own weight.

It didn't escape anyone's attention, of course, that Google got big -- big media kind of big -- by fanning out across all those smaller places. To visit www.google.com, however, is still to be impressed by a plain and simple presentation that says it's not about me, it's about you.

Where would you like to go today? Feeling lucky?

No one I know who works with Google would list humility as one of their positive business attributes, but long ago someone inside that company posted a fearsome, giant beast to guard the homepage, and that has made all the difference to their ability to think about the world in which they live.

Famously, Yahoo took the other path (and hired Terry Semel), but it is too soon to say that Google won and Yahoo lost. After all, we have teachable moment number one to consider, which is that the evolution of new media -- television, radio, etc. -- takes a long time, revealing itself not in years, but in generations.

I worked for USA Today, which broke the four-color newspaper barrier in 1982. Twenty years later, in 2002, the Wall Street Journal was the last major daily to introduce color to its pages. It took a generation for newspapers to embrace the change begun by USA Today.

The emerging generation of online audiences doesn't use search engines. It doesn't use portals, either. It's facile and familiar with the Internet and unafraid of social network content and user-generated content and independent content without pretense of any sort. It is comfortable with the wide or small screen. It is deeply suspicious of advertising and presumes an ability to skip, close or opt-out of messages. It is accustomed to power.

Yahoo knows more about these things than Google after years of selling brand advertising. It has been knocked down and kicked around and its skin is much thicker today. It is too soon to be picking winners, therefore, and not too late to learn.

The Semel moment teaches us, once more, to face the consumer. Be outward looking, not inward looking. Place a premium on understanding consumer attributes, not product attributes, and align your media (and/or your media business) accordingly -- with those consumer attributes.

Paid search enables this, simply, in the same way that the Yellow Pages do for the telephone. Yet, no one thinks of the telephone book as the telephone, and no one thinks of search as the Internet. As users, we think about the conversations that happen next.

So, we can make sense of the urgency to acquire network capabilities exhibited by major players over the last few months and understand the departure of Terry Semel as Yahoo's response to think less about developing content and more about developing distribution, both paid search distribution á la Google and broader display distribution with Right Media.

But, there are more lessons ahead. Within the next few years, when the amount of money spent online is expected to more than double from what it is today , having distribution won't be enough because, of course, everyone will have distribution.

That's when Terry Semel, or someone like him, will be back at the head of the class helping publishers and advertisers sort out the differences between networks by investing in the substance of those differences. And that's when, perhaps, the Internet will finally graduate as a mainstream medium with full honors.