Doubling Down on Data

You may recall that just a few weeks back, in commenting on Google's acquisition of ITA, the airline flight data powerhouse, I suggested that "... the world is now starting to realize what data publishers have always known: for many types of searches, fielded, parametric search is much more productive than full-text searching. Google seems to be tiring of trying to develop programs to synthesize structure where none exists."

 

Well little more than a week after that, Google announces still another acquisition, this time of a company called Metaweb. Metaweb's claim to fame is operating a "database of things in the world." That's pretty fluffy, but it appears Metawab's database included structured information on millions of movies, books, celebrities, companies and more. In short, Metaweb could be construed as a database platform to allow Google to quickly move into a lot more vertical markets.

If you're dubious about this, consider this quote from the official Google blog:

"But what about [answering questions such as] colleges on the west coast with tuition under $30,000 or actors over 40 who have won at least one Oscar? These are hard questions, and we've acquired Metaweb because we believe working together we'll be able to provide better answers."

This sure leaves the impression Google is rapidly gaining a new appreciation for structured data and parametric search, and that it is shifting to a buy over build strategy in the interest of speed.

Answers as to where this acquisition takes Google won't be apparent for a while, but this is one we all need to monitor.

Travels with Google

By now, you have certainly heard about Google's plans to acquire ITA Software for $700 million. ITA is a remarkable company that made its business and its fortune by making sense out of airline flight data. By some reports, ITA data now supports over 65% of all airline bookings. As just one metric, ITA servers process over one million travel queries per second.

The big question everyone is asking of Google is "why travel?" The more important question we are asking is, "why data?"

There are a couple of relatively simple explanations for why Google is chasing the travel vertical. First, it's a huge market that touches almost everyone at some point. If Google can do a better job with travel-related search results, it pleases a lot of its users, keeping them loyal and happy. From a financial perspective, travel involves huge numbers of relatively high-value transactions. The more Google can inject itself into this mix, the better positioned it is to make money as an intermediary. Many punidts see Google moving to cost-per-action (CPA) pricing in travel. In other words, it will be selling leads to travel providers. It's also possible that Google is looking over its shoulder at Microsoft's Bing search engine, which singled out the travel vertical for special attention since its inception.

But let's get to the more relevant question: why data? An article in Seeking Alpha does a nice job of summarizing the ITA deal and where Google is likely to go in travel. It then ends with two remarkable sentences:

"If Google does start to go after vertical search in the same way that Bing does already, search results will look a lot less uniform than they do today. Those much-maligned "ten blue links" just don't cut it anymore."

Wow! There seems to be an emerging consensus that plain vanilla search is getting a bit tired and may not in fact deliver the best possible results for every conceivable query. Indeed, travel is a wonderful example of this. You wouldn't even consider trying to find a flight between New York and Los Angeles using Google. It's somewhere between impractical and impossible. The only way to fix that problem: introduce structured data content into the mix. In short, the world is now starting to realize what data publishers have always known: for many types of searches, fielded, parametric search is much more productive than full-text searching. Google seems to be tiring of trying to develop programs to synthesize structure where none exists.

Indeed, a number of pundits see Google moving increasingly into vertical search. It's already been reported that Google is interested in real estate listings data. What we're likely to see is Google move into a number of the largest B2C markets, snap up key data providers, and build out optimized vertical search platforms in those markets. And it's not just Google. Just today, Yahoo announced its real estate listings would be powered by Zillow.

Longer-term, my sense is that Google is going to morph into a whole new type of search engine, moving away from its historical insistence that it can provide a "one size fits all" solution. This will, I believe, also begin to shake advertisers out of their belief that Google is the optimal, "one size fits all" online advertising solution. Coupled with this implicit endorsement of vertical search by Google, I'd say this could be longer-term good news for those of us already in the vertical search business, particularly B2B markets where Google is far less likely to play.

This is just one more waypoint in a long and fascinating journey. Buckle up!

InfoCommerce Models of Excellence

 

InfoCommerce Groupo is pleased two announce two nominees for its pretigious Model of Excellence Award in 2010:

 

 

iSell from OneSource - full profile here

Paladin Registry from Paladin Registry LLC - full profile here

 

Click here to see all InfoCommerce Group Model of Excellence nominees and winners from 2003-2010

The Great Commoditization

It's no secret that we've transformed ourselves into a service-based economy. This is often expressed indirectly through the lament that as a nation, "we just don't make anything anymore." And it does certainly seem that more of us are engaged in marketing, managing and monetizing than manufacturing these days. But this shift doesn't just apply to clothing, automobiles and consumer electronics; it also applies to content.

There's no agreed-upon single definition for Web 2.0, but the commonality I saw in new ventures commonly labeled as Web 2.0 was a focus on aggregating, manipulating, presenting and (occasionally) licensing content, but rarely if ever creating any content. Where content was created, more often than not it was via user-generated content. In short, while these ventures needed content, few if any wanted to be in the business of creating it themselves. This no doubt explains the amazing proliferation of Web 2.0 ventures. There are lots of talented programmers out there, and (seemingly) unlimited funding for websites that can be developed quickly and have none of the cost or complexity of proprietary content associated with them.

We're seeing the same thing now in the news business, with the growth of so-called "content farms." These are companies that employ legions of underpaid writers to crank out timely, "SEO friendly" stories that are piped to subscribing websites that need an endless supply of new content but don't want the bother of creating it themselves.

Perhaps you see where I am headed. With everyone re-purposing a large but ultimately fixed pool of content, said content ultimately gets commoditized. All this "plug and play" content is incredibly convenient, but value goes down as availability goes up.

This leaves those of us with high-value, proprietary content in an enormously strong position. We are the remaining few who still are making something distinctive, unique and valuable. And as those who prefer to distribute content rather than create content begin to feel the effects of "The Great Commoditization",  I am predicting there will be huge pressure to obtain valuable, distinctive content. Data publishers may or may not choose to work with these companies, but there's no feeling quite like a bunch of people banging on your door, checkbooks in hand. Building and maintaining quality databases has never been easy work, but it is poised to become even more rewarding.

Data Central

Since the mid 1980's, I have been repeatedly involved with ventures that sought to do one thing: help companies organize and manage how they appeared in directories. The objective of gaining control of one's appearance in directories was to insure accuracy (are the correct address and phone numbers being presented?) and to maximize exposure (is our entire product line being fully represented?) of a company's often large and complex product offerings. These ventures usually saw their market as larger companies that had the most complexity and at the same time had the strongest desire to be "easy to do business with."

The strength and weakness of these ventures was they existed in the days when directories were print-based. Imagine the task of trying to manage the contact and product information for DuPont across thousands of print directories! It was important but thankless work, and it was tough to make a lot of money because the work was inherently labor-intensive.

Why the trip down memory lane? Because I recently ran across a company called Universal Business Listing that is an updated version of these old paper-based services. Universal Business Listing has two big advantages over the old model: its service is automated, and there is now a reason for smaller businesses to worry about how they appear online.

For a modest annual fee, Universal Business Listing both expands and manages a company's online presence. You provide accurate information about your business. Universal Business Listing starts by submitting it to infoGROUP and Acxiom, the "feeder databases" for so many online directories. It also helps you get listed and stay current in directory assistance databases, local business databases, social media sites and even in GPS navigation software.

Where Universal Business Listing is weak is with vertical business directories, and this presents an opportunity for data publishers who continually struggle to keep their data current. Also, a service such as Universal Business Listing could be an interesting add-on service for buying guide publishers seeking to enhance their value proposition to their advertisers, a topic -- by the way -- that we'll focus on at our DataContent 2010 conference this fall in Philadelphia.

For the record, InfoCommerce Group has no interest in, or business relationship with, Universal Business Listing.

Schizo Business Model

What is really hurting newspapers and magazines is not discussed all that much: a schizophrenic business model.  

 

Let's use the example of a major magazine. It has investigative reporters working for months on a story, and their research uncovers a major scandal. The magazine at this point has two things: many thousands of dollars invested, and truly proprietary content. What is the natural instinct of the magazine at that point? To tell it to the world as quickly and loudly as possible. Maybe in the old days that was a way to sell more magazines, but in today's world it is just the opposite.

I remember not too long ago, an interesting, important story was published in the New Yorker, a magazine to which I subscribe in print. I first heard about the story when its author went on NPR and spent 20 minutes revealing every last bit of  it on the air. That was followed by dozens of news articles and blog posts, a good percentage of which linked to the full story, which was freely available on the New Yorker web site. Ultimately, I was so interested in the story, I clicked through and read the story online, ironically surrounded by ads beseeching me to purchase a print subscription to the New Yorker. Several days after reading the story online, my print copy of the New Yorker arrived, raising a critical question: who's the fool?

 

This takes us to what I think is the heart of the issue: newspapers and magazines are resisting paywalls only in part because they fear nobody will pay. An equally large but unstated concern is that they will lose their power and influence, something that has become integral to their business model but that is leaving them dangerously exposed in the current media environment. 

Being able to get attention on the national stage is the stuff of awards and prizes, and respect from your peers. And a loud public voice gets you political clout and the attention and respect of all sorts of powerful and important people. But this no longer fuels subscription sales, if indeed it ever did. In short, there are tremendous built-in pressures in these businesses to distribute their content fast, furiously and free. Chasing the public spotlight to push your way into the center of the action was economically viable when advertisers were footing all the bills, but those days are gone. There was a time when much of the news media could have it both ways:  prestige and profits. Now, it's looking increasingly as if they'll have to choose between the two.