AOL, Tech Crunch and the Rules of the Game

The latest controversy between AOL and Michael Arrington is a fascinating story. Strong personalities with strong points of view, editorial ethics, management missteps, and big company culture versus small company passion make this a particularly juicy drama.

Arrington has made an ultimatum to AOL: Give us “editorial independence” or sell us the site back. By “editorial independence” Arrington means that Tech Crunch can continue writing about companies that he invests in via his Crunch Fund.  All of a sudden AOL has realized that this might possibly pose a conflict of interest.

Give me a break. When they bought Tech Crunch AOL was buying a page view engine, not quality journalism. Internal AOL memos show that the acquisition of Tech Crunch was all about content automation, not the content itself. Naming Arriana Huffington, the ultimate brandividual, as head of content demonstrates that AOL management thinks search rankings and posts per hour metrics suffice as editorial management. AOL itself was going to put money into Crunch Fund. And anyone who spends time in the Silicon Valley knows Michael Arrington’s story; a clever journalist with an out-sized flare for the dramatic and an extraordinary talent for self promotion.

Let me know your thoughts. Did AOL not really understand what and who they were buying? Or are they genuinely concerned about quality journalism and editorial ethics?

Newspapers Clipped By The Web

A newspaper was always so much more to its readers than a printed page full of news. It was the place that provided local, regional, national and international news. It was also at the center of your universe, your community. It was a breakfast routine. It was utilitarian as well as informational.

Unfortunately, everything that newspapers once provided is now available on the Internet in an efficient, immediate, and less expensive format. Let’s review.

Newspapers provided news and analysis, breaking news, opinion, arts and entertainment criticism. Now you can keep up to date with minute-by-minute breaking news with RSS Feeds, Google News, newspaper online news alerts, or the Huffington Post. Winner: The Internet.

We turned to the newspaper for shopping information. We could check the latest discount prices for tires, or learn when department store sales began. It was where we looked for a job or an apartment to rent. Now, we get daily deals from Groupon, roommates from Craigslist, and direct offers in emails from the few surviving department stores. Winner: The Internet.

Although journalists didn’t like to admit it, newspapers were a form of entertainment and education. We laughed while reading Dilbert and other comics. We chuckled at the advice from Ann Landers. And we improved our Bridge game with moves provided by the newspaper column. Now, we can find all of that and much more, including educational or entertaining You Tube videos, from an array of internet sites such as,, even Plus we get to share with others who have similar interests. Winner: The Internet.

At least newspapers were full of helpful data: the closing stock prices, the starting times for movies, and obituaries. But Fandango will tell you what time the movie starts, what others think of it, and let you order a ticket. Who wants to see yesterday’s closing stock price when you can get up to the minute pricing from And the Web even now has obituaries and death notices. Winner: The Internet.

But at least a newspaper provided the glue that kept a community engaged and together. You couldn’t start your day if you worked in the U.S. government or national politics without reading the Washington Post, and the Los Angeles Times entertainment section was the “bible” for movie executives. But now people with shared interests turn to Facebook or LinkedIn to see what is “hot” in their industry. Winner: The Internet.

So it’s no wonder newspaper company stocks are no longer the darling of Wall Street. Newspapers made with ink and paper, delivered by trucks, will be around for some time, at least until the Baby Boomer generation dies off, but their profits and readership will continue to deteriorate.

In a recent Ad Age survey published on Silicon Alley Insider, “local news” and “coupons” remain the two biggest reasons consumers subscribe to a local newspaper. So if you are a newspaper executive, you have to be paying a lot of attention to the future of Groupon, which may eventually replace newspaper coupons, and AOL’s Patch, which is trying to deliver local neighborhood news on over 500 community sites.

I’m just glad I don’t work for a newspaper company any more.

The Love Practicum

The idea that love is “just damn good business” (as I suggested in my previous post) is equally easy to embrace or dismiss, depending on your personal bias or point of view.

Assuming for a moment that you’re one who accepts the idea (and if you’re not, consider this anyway—you may surprise yourself) how do you go about putting it into practice in your business? How do you take the idea (or ideal) of love-at-work and translate it into the ways that you and yours make things happen every day?

It’s a huge challenge, but you can start by taking a lesson from superstar technical talent agency, Kineticom. Love is not an idea for this $60 million dollar, award-winning, Inc. 500 company, it’s a practice that their employees are hired for and measured on.

Cultivating Love is not only one of Kineticom’s core values, it’s part of their performance evaluations, too (as well as the other practices of Extreme Leadership: Energy, Audacity and Proof). They’ve made Love a cultural expectation and, therefore, a day to day reality.

Pretend for a moment that you work at Kineticom, and it’s time for your evaluation. Here’s how you’d be sized up, love-wise (thanks to the Kineticom gang for their permission to share):

Their evaluation defines Cultivating Love like this:

Demonstrating love (of the future we’re working together to create) in the way they work with, serve, and lead the people around them. (Leadership includes peer level.) Love in this sense is a feeling of strong attachment induced by that which delights or commands admiration; preeminent kindness or devotion to another. At its core, being an Extreme Leader means doing what you love in the service of those who love what you do.

Their description of the lowest rating in the Love category:

Views daily actions and efforts as part of a job, not part of a broader future that employee has a key role in creating. Does not understand or connect personal or organizational opportunity to make a difference in the world.

And the highest rating:

Fully and actively embodies love in the way they work with, serve, and lead the people around them. Consistently cultivates love of the future we’re creating together in teammates, contractors and/or clients through tangible actions.

Sure, that may still sound a little subjective—maybe that’s the nature of the beast—but the implications are anything but: those who consistently rate high on this attribute (and the others) are given greater opportunities, more money and, potentially, stock in the company.

How do your measurements and performance standards stack up?

Try putting a little heart in there, and see if you can’t make the experience of working with you a practicum in the Business Theory of Love.

My Conversation with Steven Waldman, Senior Advisor, FCC

“Assistant to the Chairman of the FCC on the Future of Media” is without question one of the coolest titles I’ve ever seen. Even cooler that it’s the title of my friend and former colleague Steve Waldman. Steve and I worked together on the influential internet site Beliefnet.  After 10 years with Beliefnet he recently joined the FCC as Senior Advisor to the Chairman, leading the future of media project.

In the announcement on Steve’s new role, FCC  Chairman Julius Genachowski was quoted as saying:

A strong consensus has developed that we’re at a pivotal moment in the history of the media and communications, because of game-changing new technologies as well as the economic downturn…  At such a moment, it is important to ensure that our policies promote a vibrant media landscape that furthers long-standing goals of serving the information needs of communities. The initiative is intended to identify the best ideas for achieving those goal, while recognizing that government must be scrupulous in abiding by the First Amendment and never dictating or controlling the content of the news or other communications protected by the First Amendment.

I read one of the first pieces Steve did on the FCC’s  “Future of Media” project and frankly I was blown away.  I reached out to him to see if he would be interested in sharing his thoughts on the role of the FCC and the Future of Media project.  Here’s what he had to say:

As we researched our Federal Communications Commission report – “Information Needs of Communities: The Changing Media Landscape in a Broadband Age”  — we became convinced that much is misunderstood about the historical role of government in the development of media and communications.  Neither consistently libertarian nor socialistic, it has instead been a history of episodic interventions – sometimes visionary, sometimes parochial.  Some of these have made sense and some haven’t – and when we offered analysis and recommendations for our report, we tried to learn from that history.

For instance, the federal government has done well when it has focused on the development of communications infrastructure.  It managed the creation of broadcast, satellite and cable TV. Oh, and it financed the creation of the Internet and the development of satellites. Not bad. Government also does well when it establishes rules of fairness, to prevent abuse by certain market players and allow for continued innovation.

On the other hand, when it comes to the content of the media, the U.S. government is appropriately limited by the First Amendment.

We were presented with a dilemma. After year and a half of research, we found that the media landscape simultaneously has great bounty – tremendous innovation in nearly every crevice – and yet some serious deficits. We especially found a serious gap in local accountability reporting – the kind of journalism that helps prevent corruption in city hall, pollution in the local river or incompetence at the school board.  This is a big problem – one which the digital revolution had not yet solved.

Yet we also were extremely conscious of government’s limitations. As a result, in our recommendations we focused on a few areas:

  • Universal broadband.  Since his first day in office as Chairman of the FCC, Julius Genachowski has made the achievement of universal broadband and the preservation of an open Internet his top priorities.  As part of this agenda, he has pushed to make more spectrum available for wireless broadband and to refuse the  Universal Service Fund to help subsidize the spread of high-speed Internet capacity.
  • Though universal broadband was a crucial goal for Chairman Genachowski since day one, the Information Needs of Community report found another reason for these policies: they’re essential for helping media innovation to take root on the local level.  This is a matter of both equity and economics.  Communities suffer when newspapers contract. In some cases, new digital news operations have sprung up to fill the gaps but they are of no use to those who are not online.   Those people have the worst of both worlds.  It’s also a matter of economics.  If 100 percent of Americans gain access to the Internet, that will constitute a 50 percent increase in the number of people online.  That is bound to make it easier for local news entrepreneurs to create successful models.
  • Government should become far more aggressive and open in putting data online.  This enables citizens to hold institutions accountable, creates opportunities for new information-based businesses and reduces the cost of journalism.
  • The federal government spent $1 billion in advertising in 2005.  Why not have the feds target that toward local news media – “old media” and new, for-profit and nonprofit – to improve the cost-effectiveness of taxpayer spending and help local media?
  • The tax code should be change to remove obstacles to nonprofit news innovation. The philanthropic world needed to increase its commitment to nonprofit media, especially of the sort that is not yet being taken care of by the commercial sector.

These are just a few of many recommendations.  Suffice it to say, the nation is at a critical moment. I hope your readers will review this analysis and let us know what they think.  Here is an overview:

And here is the full report:

My thanks to Steve for taking the time to share his views with the Uphoff on Media community. Please let us know what you think about the role of the FCC and government in media’s future.

Value This!

In order to buy  a company you need to value it.    That’s not so easy in the media business, these days.

Lots of folks refer to multiples, of cash flow or revenue or whatever, as a way of determining future value.   You project the expected future performance of the company, factor in the cost of capital, and calculate a price.  Excel does this very well.

But any such formula for pricing a company relies on a degree of certainty about the nature and value of what the company does. At media industry conferences the overwhelming sense is one of uncertainty about this. Will print finally go away?  To what extent will search be supplanted by social?  Are apps replacing the browser?  Will virtual events supplant or enhance live events?  How media products are consumed and used has become entirely unpredictable.  There’s plenty of agitated debate, much of it legitimate, but none of it conclusive.  The only thing anyone can agree on is that the media business will have to continue to adapt.

So, how can you value a media business today?  Any valid projection of future value of a business requires you to make good assumptions about the shape of that business six months, a year, and five years from now.  That’s pretty hard to do in the media business.

While I’m not about to throw away the spreadsheet, I think any valuation of a media property these days needs rely on qualitative factors:

  • What are the attributes of the market served?
  • How deep are the relationships between the media company and the audiences/content consumers and suppliers/advertisers?
  • How plugged-in and adaptable is the talent pool of the company?

I happen to believe that strong, innovative media companies will take advantage of this state of continual flux.  They will adapt and prosper. Weaker, more static, media companies will go away. Figuring out which is which can’t be done in Excel.

Google+ : 5 Key Questions for Media and Marketing Pro’s

Unless you’ve been living under a rock for the last week, you have likely heard all about Google’s latest step into social networking, Google+. I received my invitation to test the Beta version last week and have spent some time with the platform. For Uphoff On Media readers who haven’t yet received an invitation please send us your gmail address, via the comment feature, and we’d be happy to send you one.

It’s easy to dismiss the continual “new, new thing”  hype-cycle that comes out of the Silicon Valley.  But I think Google+ is worth paying attention to.

  1. Hasn’t Google Failed in Social Media Before? Well yes. By most every measure Google’s steps in social media; see Okurt and Buzz as examples, have been failures. And there is certainly no guarantee that Google+ will be successful. From a standing start, looking up at Facebook’s 750 million active users is daunting. Google has a huge and powerful base of Google Search, Gmail and Google Doc users to build on though. This doesn’t take Droid phone users into account either. Different than other Google attempts at social media, Google+ serves as a natural platform for other Google services and applications like mail and docs. They have also integrated chat, YouTube and video chat, via a feature called “Hangouts”. (Have to say though, Newt Gingrich hosting the first political “Hangout” on Google+ was a buzz kill. But I digress…).The result is a dashboard like platform where users can smoothly move back and forth between search, mail, document management, chat and social networking. Oh yea, they can also optimize this experience through their own browser called Chrome too.
  2. Does the World Really Need Another Social Network? Depends on who you ask. It also depends on what you mean by “social network”. Given the extraordinary rise of Facebook and the relative cost of switching to another social network you would think that launching a competitive network would be foolish. On the other hand Facebook really has no direct competition and the level of world wide adoption of social networking would suggest that the market will support competitive offerings. When Google  was launched in 1999, there were 14 other search engines, several with huge traffic and consolidation of the market had already started. Google is not a company intimidated by competition or what might seem to others as insurmountable barriers to entry. I also don’t think they view Google+ as a social network. Their ambition is much larger. They see Google+ as the platform for search, social, email, video, document management and voice. A new operating system if you will, where social networking is simply a feature not a stand alone product.
  3. Will Google+ Be a Traffic Driver? We have seen a clear shift from Search to Social. This shift has effected web behavior and traffic and make no mistake about it, the folks at Google have noticed. Anyone seen Eric Schmidt around lately?  The days of SEO and SEM being the only major drivers of building web traffic are waning and social media and applications are starting to surpass them. Before my SEO pals get all energized here, let me be clear…The need to assure that your content is discoverable via Search isn’t going away. There is a new and powerful player in building web audience however and its Social. Arguably, Google+ provides the best of both worlds. Content that is posted via Google+ and content that is posted on the open web will be discoverable by search and social. Stay tuned however, Mark Zuckerberg and his pals at Facebook have been looking at this issue as well and what have been viewed as private posts on Facebook are increasingly accessible to the open web via search engines.
  4. Is Google+ an Over-Reaction to Facebook? No. Google+ represents a significant pivot by a large company that realizes there has been a profound market transition and they need to make a move to continue to be a dominant player. My sense is that while Google is watching Facebook very carefully, as FB represents a significant threat to their core advertising business, their ambitions are far larger. Given the integration of Mail, Document Mgt, Messaging, Video and Voice into a dashboard like experience; Google is taking the next step in their enterprise ambitions. Is Google+ a Trojan Horse for the enterprise market? You could make that argument. If I were Microsoft, Oracle,, IBM and Jive Software I’d be paying close attention. And knowing these companies, I can assure you they are.
  5. Who Wins in the Platform Battle Between, Google, Facebook and Others? Simply put, we all do. Markets always benefit by strong competition. We have already seen Facebook make several announcements, including the integration of Skype, in obvious and appropriate reaction to Google+. Apple, once a close partner to Google, dropped Eric Schmidt from the board and threatened a series of lawsuits around the launch of the Nexus 1 and Droid phones. The competition in wireless phones between Google and Apple has stimulated innovation in iPhone and Android OS phones alike. And the beneficiaries are the users. As Google and Facebook overtly push into the business marketplace we will see a new range of competitors take steps as well. The level of innovation we’ve seen in enterprise technology over the last 2 years; Enterprise 2.0 if you will, has exceeded the previous 10 years. I think the impact of nimble and innovative companies like Apple, Google and Facebook, who have traditionally been considered consumer technology companies, has been a major reason why.

I’m betting that Google+’s tight integration with email and search will make it a viable, lasting competitor to other social platforms. What do you think the impact will be for you as a media, marketing or technology pro? Drop me a note with your thoughts on how you see Google+ impacting the competitive landscape.

Newspapers Dying: The Demise of Geographic Exclusivity

There are so many reasons why print newspapers are failing.

Mostly, people complain that newspaper content is available on the Internet for free, so subscribers need not subscribe any longer, even though in reality circulation revenues were usually not more than 20% of total revenues. Or, more importantly, that classified advertising, the largest profit contributor of any newspaper, has been outdone by the efficiency of transactional web sites for homes, autos and jobs. Then there was the retail consolidation of big box stores, who hardly advertise, and chain department stores (only one advertiser rather than three or four).  And the many new alternative ways in which a local merchant can advertise–see Google, Facebook, and Bogopod, to name a few. (Disclosure: I am an investor in Bogopod).  Still, what few realize is that most of the newspapers that have actually gone “belly up” have been afternoon papers or ones that were owned by overly leveraged companies.

But one of the underlying reasons of this massive change in newspaperdom doesn’t get enough attention: the demise of geographic exclusivity. In the good old days, when I was a newspaper executive at the Los Angeles Times, newspapers “owned” a market.  What did that mean?  It often meant we were “the only game in town” for both editorial content and advertising; which, in turn, meant, lots of cash flow and extraordinarily high profit margins. Newspapers are capital intensive entities. It takes a lot of cash to build a printing press, but once built, the barriers to entry for others were so very high, that you had a near geographic monopoly. Newspapers worried about competing in neighboring geographies, but not about someone from overseas or across the country invading their core territory.

So if you were a reader in Fresno, California, your only choice for local news was the McClatchy newspaper or the TV stations (which generally didn’t do a very good job on news other than car chases and crime).

And if you were a merchant in that same town, you had limited advertising choices, the newspaper which usually had the greatest reach, a TV or radio station, or perhaps direct mail. That was it. The newspaper “owned” the market.

The Internet ended geographic exclusivity.  Now you can get news from all over the world.  You don’t have to rely on the foreign correspondent of the Los Angeles Times stationed in Jerusalem or London, you can quickly find a more comprehensive take from the Jerusalem Post or the Financial Times, and have it brought directly to you on your iPad by Pulse, Flipboard, Trove, or StumbleUpon.

More important even than the readership problem, and, the real reason the local newspaper business model is dying is that advertisers from around the world can now reach you directly. They can advertise directly to you and deliver their product directly to you.  I still remember department store executives marveling at how powerful the Los Angeles Times was in this era, they could promote a sweater on the pages of the paper, and they would sell out of sweaters the next day.  The consumer had no other place to go. . . .to hear about the sweater, to see it or to buy it.  Now, the consumer can get to the sweater directly, on a multitude of web sites, use search to find it (and see advertising about it), see what other sweater owners think of it or even get a 10% off coupon by email.

Without geographic exclusivity, the newspaper business will never be the same.  Advertising will simply not return to its rich levels. Newspapers may survive, but in a very different form, with less information, less frequency, and less impact. The challenge, of course, is to figure out new business models to support the important journalism that newspapers provide. Well, that’s for future posts. Got any ideas?

Moments of Truth

In the early 1980’s Jan Carlson took over SAS airlines. The company was in poor shape and Carlson set about to turn it around. He boiled the business down to a series of what he called “moments of truth”. These moments were touch points where key interactions with customers or employees took place. He defined being greeted at curb-side check in,  met and served by a ticket agent and the cleanliness of the airplane as moments of truth, that were opportunities to either make or break the business. He went on to define similar moments with managers interactions with employees. I read his book, “Moments of Truth” in the late 80’s and it had a profound impact on me.

Moments of truth can be hard to focus on during times of change like we’ve had in the media industry over the last decade. The speed and metric based nature of the Internet can also make it difficult to identify and monitor the moments in your business. Perhaps this is why it’s time to focus on the moments of truth in media now. A colleague of mine brought “Moments of Truth” up in a meeting recently and it got me to thinking about its applicability in today’s media business.

  • Know the bell of truth when you hear it ring. We are awash in data. Never before have we had so much data on our audiences, our brands our products and our employees. After more than a decade of a Wizard of Oz belief in search; generated by a mysterious and all powerful algorithm that regularly changes and no one understands, a socially reticent, Harvard dropout reminded us that it’s the connection with people that matters. The simple moment of truth about the social layer is it allows people to connect with their interests through people they respect, like and know. Dorothy taught us this in 1936, exposing the Wizard of Oz for what he was. Easy for me to note this now. I’ve gotten as caught up in gaming Google as anyone. The reality is though SEO isn’t a moment of truth. It’s a powerful and appropriate mechanism to assist with discoverability on the Internet. Audiences are people and people are social beings however. Not data points reflected by algorithms sitting on servers in the silicon valley.
  • Spread Sheets and Deal Terms. The astounding level of metrics we can derive from the web can take on a life of it’s own. From CPC to CTR’s to CPA and CPL the acronyms reflect a phase of deal term and spread sheet selling. These metrics are important and demonstrate the performance based value of online media.They do not replace however, the need to understand a clients business, create proposals that reflect this understanding and deliver marketing as a service that assures marketers receive ongoing value. Again here this cannot be automated. The moment of truth with your marketing customer does not reside on a spread sheet. It is contained in your ability to understand their business and create successful programs that will benefit their marketing.
  • Presence Matters. Always. People cannot be inspired, led or managed via email. Responses to surveys about employee attitudes or customer interests tell you only so much. People respond to people. Leadership and management is tough. It requires time, patience and emotional resilience. It also requires presence. There is no greater moment of truth than when you meet with customers or employees. It is this moment that is the lifeblood of the media business. It is also the lifeblood of any business.

What moments of truth do you see in your business? Are they changing? How do you track them?

Welcome to an expanded Uphoff On Media

My goal in launching Uphoff On Media 2 years ago was simple: experience and learn social media and create a place where I could capture the conversations I have with media, marketing and technology leaders. I quickly learned a couple of things… First off, while I write regularly as a part of my job,organizing thoughts in a 200-300 word blog post is far more challenging than I had imagined. I gained a new level of respect for my content colleagues.  Second, I learned what Mark Twain really meant when he said  “If I had more time I would have written you a shorter letter.” I found that blogging can ignite feedback and commentary via a wide range of avenues. People commented back on blog posts via email, FaceBook, IM, Text and in live meetings. I was giving an interview about a year ago and the reporter asked a question regarding “something you said about the media company of the future…” A few minutes later it became clear that the reporter had read a blog post of mine but not referenced it as such.

I want to take these conversations to the next level. With this post, I welcome you to the new and expanded Uphoff On Media. Based on feedback from colleagues, friends, family and the UOM audience, we have enhanced the site, adding additional contributors, social media functionality and a new design. Several friends of mine, who also happen to be experts in their fields, have kindly agreed to participate. Charlie McCurdy, CEO of Apprise Media; Jeff Klein, Founder of 101 Media, ex-LA Times executive and currently professor at USC’s Annenberg School; Jeff Sweat, director of B2B marketing and social media for Yahoo! and the editor-in-chief of the Yahoo! Advertising Blog; and Steve Farber, Author of the book “The LEAP” and former CEO of Tom Peters Inc, will all be regular contributors. We will be adding additional voices over the next few months as well.

Please let me know what you think of the new site. UOM is still focused on the initial goal; experience and learn about social media and create a place to capture discussions with thought leaders in media, marketing and technology. The site remains a personal labor of love. We look forward to your thoughts on topics and issues you’d like us to cover and as always please feel free to join in.

Have you ever sold your home?

Have you ever sold your home?  One you’ve lived in for a while and has all the comforts of home?  If you’re like me, you imagine how potential buyers are going to admire the kitchen, the yard, even little things like the switch plate covers.  You hire a broker, get your home listed on or wherever, put the cinnamon apple in the oven, and hold an open house.  You’re ready to wow them!

And, every gawker has a subtlety—or completely–different view of the very same house.  What they love or hate, what they’d keep or change.  If you could see a mind-video of how each person imagined your home, it would be a disorienting experience.  And someone steps up and pays the highest price and creates their own dream house.

Have you ever sold your company?  The one you’ve honed to top performance, with every competitive edge?  We went through this process last summer with Canon Communications.  The buyer, United Business Media, saw an opportunity for continued growth, but from a very different perspective, and they’ve remodeled the company to address that opportunity.

So, now I’m one of those gawkers scouring the listings, knocking on doors, imagining my “dream company”. And in this period of rapid change, finding the most appealing features of a company isn’t the way it used to be.  Imagine looking at a home during a period of rapid global warming—a waterfront property may be much less appealing than a house a mile inland!  Those wood-burning-fireplaces may be worth avoiding!

I’d like to keep you posted on my progress.  Unlike homes for sale, the process of selling a company is often kept highly confidential, so I’ll have to keep pretty non-specific and talk at a fairly strategic level.  But, maybe that will make the discussion more fun…