Doing Buying Guides the Intuit(ive) Way
This is potentially a big development, though it has not garnered much fanfare in the press: Google has announced a partnership with Intuit, publisher of the ubiquitous QuickBooks software, to provide seamless integration between QuickBooks and both Google Maps, Google AdSense and Google Base. Interesting but not huge news you say? Wait, there's more.
Intuit, using technology from a company it recently acquired called StepUp Commerce, will create an interface between Google and QuickBooks that will allow businesses to not only upload their product information to Google Base, but real-time inventory status as well. Google, with help from its new best friend Intuit, has put all the pieces together: discovery by location and by product, along with critical inventory data, something that even the largest companies still struggle to provide online.
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Another thing Google gets out of this deal: a new sales channel that could well reduce its need to partner with yellow pages publishers to get "feet on the street." Intuit has huge penetration of the small business market and has shown real prowess over the years selling such add-on services as payroll and credit card processing. It even has integrated a vendor rating program (Zipingo.com) and has even previously provided direct access to credit reports (D&B).
Anyone with product buying guides, particularly yellow pages publishers, needs to be monitoring this program closely. Google, through Intuit, is trying to assemble product-level data in a database format, enhanced with real-time inventory data, all tied together with strong discovery tools. Play this scenario out, and it could portend radical and largely unpleasant changes to those of us, both B2B and B2C, who are involved with product information.
More realistically, this is going to take some time to get off the ground. Though details are sketchy, we will assume Intuit will try to charge for this new service, creating a paid participation revenue model that tends to yield uneven and incomplete product catalogs. At the same time, if this new program captures the imagination of small businesses, and Intuit doesn't get too greedy, its implications could be huge. At the very least, Google is once again upping the ante for data publishers, by providing the real-time inventory data that few product guide publishers provide today.
The Power of Partnering
The announcement of the latest Google beta offering, Google News Archive has finally pushed the "friend or foe" debate into more positive territory.
Google News Archive is being positioned by Google as a way to search for historical information online. In reality, it is Google's first significant effort to get involved with paid content, largely on an a la carte basis. The most important aspect of this is that it's the first cooperative effort between Google and publishers, with publishers happily furnishing their paid access content, on whatever basis works for them, in exchange for the huge visibility Google can provide.
Providers such as Factiva, Alacra, HighBeam, LexisNexis, the Wall Street Journal and the New York Times are all eagerly jumping on board this new Google initiative, despite it's potentially threatening if not disruptive effect on their business models. Google probably made their buy-ins less painful by not trying to force these publishers into a one size fits all approach, and (at least for now) doing everything for free. Google's "yes, we have no revenue model" approach is alive and well.
Google's focus on the historical aspect of this service is truly strange, since it becomes clear from your first search that the news "archive" contains information as recent as 2006. This would seem to present issues about what goes into the main Google search index, and what goes into Google News Archive. Based on our test searches, however, this really isn't much of an issue, because virtually everything we saw in Google News Archive is offered on a paid basis, and that's the true delineation between the two services. What we have here, for all practical purposes, is Google Premium Search.
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Some of the news aggregators are selling articles on an a la carte basis, but we saw that HighBeam was offering access to articles in exchange for a free trial subscription, showing that Google can accommodate different business models within this service.
The Bottom Line on Baseline
The acquisition this week of Baseline StudioSystems by The New York Times Company is eye-catching for its cash purchase price, reportedly at close to six time revenues. But the deal looks very much like a starry-eyed gamble by The New York Times.
Baseline StudioSystems, despite its focus on the entertainment business, is very much a B2B data provider. Baseline concerns itself with the business of entertainment, providing deep detail on credits, representation and intellectual property to entertainment industry professionals. It sells online access to this content to the trade on both a subscription and a la carte business.
Recently, Baseline has begun licensing portions of its database to consumer portal sites to help them build traffic around its entertainment content. For those sites willing to buy content that can be given away in order to build traffic, Baseline represents a good licensing option.
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In waltzes the New York Times, still fresh from buying About.com for a hefty premium, and snaps up Baseline. Clearly, The Times wants to be a major online player, and is willing to write big checks to get there. The difference of course is that About.com is an advertising-based B2C operation, a model the Times knows well. But Baseline is a subscription-based B2B business, a model the Times knows ... not at all.
From published statements, it would seem the strategy of the Times is to leverage the Baseline database to build a major B2C entertainment destination. Since this destination will be data-driven, it will quickly bump heads with Internet Movie Database, a unit of Amazon.com, that has spent the last ten years becoming a major B2C entertainment destination. Of course, Baseline is currently licensing its content to other sites that have ambitions to become significant providers of B2C entertainment information, so the Times will also quickly find itself competing with its own customers.
We've been staunch advocates of B2B data publishers jumping on B2C cross-over markets where they exist. But the Times is jumping into a business it barely knows, in a highly competitive market, and hoping it will all work out without killing the golden goose in the process. Perhaps I am not giving Times management enough credit, but success here won’t come easily.
Isn't It Ironic?
I just read Michael Wolff's new article in Vanity Fair about the current travails of the New York Times. In this piece, one of his most trenchant essays in quite some time [a Michael Wolff tip -- if the article contains the word "mogul," it's not worth reading], he manages to brilliantly summarize the concern that's been nagging at me for several years now:
"...the Internet, once thought of as the ideal vehicle for reaching a targeted audience, is turning into a high-volume business, super-mass-media, dependent on cheap advertising. Success demands vast numbers: tens of millions or hundreds of millions of habituated users."
That, in a nutshell, is where things are going wrong, badly wrong. We are measuring success by the amount of traffic we get. It's the simple explanation for the recent spate of high-priced acquisitions of online propeties, among which was the acquisition of About.com by the New York Times. Wolff's blistering assessment of About.com:
"About.com may actually establish the baseline for the lowest level of information available on the Web (which is saying a lot): a multi-million-page mishmash of superficial, often out-of-date, dumb, frequently wrong info bits, a place you never go by choice, but only because a search engine has been "optimized" (that is, tricked) to send you there."
I don't know if About.com is as bad as Wolff represents, because I never go there except by accident, which of course only serves to buttress Wolff's point.
We're increasingly focused on site traffic, even though deep down we all know that traffic is not the same as audience, just as clicks are not the same as leads. Too many of us are giving away our best content, paying good money for contextual ads to drive traffic to pump up our counts, and paying talented programmers to game the search engines to improve search results rankings, even at the risk of looking stupid or misrepresenting what we do or sell. Overstated? Type "raw sewage" into Google and look at the eBay ad. And why did Google just do a $900 million deal with MySpace? In essence, to buy traffic. Yes, even Google is now effectively buying traffic.
Okay, in many cases there is an economic basis for all this. Attract enough traffic online, and you can sell a lot of advertising. But to a worrying extent, the companies buying the ads are trying to drive traffic to their own sites to sell advertising to companies trying to drive traffic to their own sites ... you get the point.
The secret to long-term online success (and survival) is not getting sucked into the easy money, perpetual motion machine that online marketing is becoming. Real value, real audiences and real leads will prevail, and those of us offering them will be insulated when the web traffic music finally stops, and there are far more participants than chairs. The long-term game is to get the right traffic, not the most traffic.
Want to read this Michael Wolff article? No need to subscribe, trek to the newsstand or even pay. Vanity Fair has thoughtfully posted it online for free, and I bet I know why: they want the traffic.
Is More Better?
I just read Michael Wolff's new article in Vanity Fair about the current travails of the New York Times. In this piece, one of his most trenchant essays in quite some time [a Michael Wolff tip -- if the article contains the word "mogul," it's not worth reading], he manages to brilliantly summarize the concern that's been nagging at me for several years now:
"...the Internet, once thought of as the ideal vehicle for reaching a targeted audience, is turning into a high-volume business, super-mass-media, dependent on cheap advertising. Success demands vast numbers: tens of millions or hundreds of millions of habituated users."
That, in a nutshell, is where things are going wrong, badly wrong. We are measuring success by the amount of traffic we get. It's the simple explanation for the recent spate of high-priced acquisitions of online properties, among which was the acquisition of About.com by the New York Times. Wolff's blistering assessment of About.com:
"About.com may actually establish the baseline for the lowest level of information available on the Web (which is saying a lot): a multi-million-page mishmash of superficial, often out-of-date, dumb, frequently wrong info bits, a place you never go by choice, but only because a search engine has been "optimized" (that is, tricked) to send you there."
I don't know if About.com is as bad as Wolff represents, because I never go there except by accident, which of course only serves to buttress Wolff's point.
We're increasingly focused on site traffic, even though deep down we all know that traffic is not the same as audience, just as clicks are not the same as leads. Too many of us are giving away our best content, paying good money for contextual ads to drive traffic to pump up our counts, and paying talented programmers to game the search engines to improve search results rankings, even at the risk of looking stupid or misrepresenting what we do or sell. Overstated? Type "raw sewage" into Google and look at the eBay ad. And why did Google just do a $900 million deal with MySpace? In essence, to buy traffic. Yes, even Google is now effectively buying traffic.
Okay, in many cases there is an economic basis for all this. Attract enough traffic online, and you can sell a lot of advertising. But to a worrying extent, the companies buying the ads are trying to drive traffic to their own sites to sell advertising to companies trying to drive traffic to their own sites ... you get the point.
The secret to long-term online success (and survival) is not getting sucked into the easy money, perpetual motion machine that online marketing is becoming. Real value, real audiences and real leads will prevail, and those of us offering them will be insulated when the web traffic music finally stops, and there are far more participants than chairs. The long-term game is to get the right traffic, not the most traffic.
Want to read this Michael Wolff article? No need to subscribe, trek to the newsstand or even pay. Vanity Fair has thoughtfully posted it online for free, and I bet I know why: they want the traffic.