Once upon a time, there was a Web company that was based not in Silicon Valley but in Santa Monica. It grew at a breathtaking rate. All of its content was created by its users, and though the pages those users created tended to look jumbled and messy, there was an enthusiasm embedded in all that busy-ness, and a fannish passion for pop-cultural pursuits. The company built up such a sheer momentum of traffic that a much bigger company was persuaded to acquire it for a massive sum of money at the height of a speculative Internet frenzy.

This story sounds like that of MySpace, the once-hot social-networking site for bands and their fans that Rupert Murdoch purchased in 2005. Once “the most popular Website in America,” as the title of a recent book had it, MySpace has been left in the dust by Facebook and Twitter in terms of innovation and growth. MySpace is in the news this week because Murdoch and his henchmen have just shown the door to the site’s founding duo, Chris DeWolfe and Tom Anderson, and replaced them with a former Facebook exec. It’s a recession out there, and Murdoch, who somehow believes that MySpace can be his entree to digital power, is eager to turn it around and demonstrate that it can become the online cash cow he has always dreamed of. Good luck there; I think that, even though Murdoch got MySpace for what many considered a bargain price (of around $500 million), it will prove an albatross around his corporate neck.

In fact, though, MySpace isn’t the company I was thinking of in that first paragraph. I was telling the story of Geocities — the MySpace of 1997-1999. Geocities was the most successful of the “build your own website” companies of the mid-90s (there were others, like Angelfire). Before there were blogs, there were Geocities pages, which were sort of like blogs except without the software to manage your content. Geocities pages were easy to build and really difficult to maintain. As a result, Geocities was populated fast — and nearly as quickly became a vast wasteland of abandoned digital real estate. It must have looked good on paper to the bizdev people at Yahoo in 1999, though, because they paid an astonishing $2.87 billion (in bubble-inflated Yahoo stock) for the ramshackle enterprise.

A decade later, Yahoo’s current management — facing tough times and after many rounds of layoffs — has decided to shut Geocities down. I don’t think there are too many people who will cry for this relic of a bygone era.

What I’m thinking is, there’s every reason to think MySpace will follow a similar trajectory, no matter how many executives huff and puff to try to reinflate its sagging appeal. If that’s the case, look for News Corp. to turn off its lights sometime in 2015 — about a decade after Murdoch’s ill-advised acquisition.

BONUS LINK: Harry McCracken surveys the top 15 Web properties of 1999 and asks, where are they now?

I did a lot of digging around in the numbers around blogging for my book, so I’m on alert when I read a piece like Mark Penn’s look at pro blogging in the Wall Street Journal, which is getting lots of attention this morning. A little skepticism is definitely in order.

Here’s the nub of hard numbers in Penn’s piece:

The best studies we can find say we are a nation of over 20 million bloggers, with 1.7 million profiting from the work, and 452,000 of those using blogging as their primary source of income. That’s almost 2 million Americans getting paid by the word, the post, or the click — whether on their site or someone else’s.

Where do these numbers come from?

“20 million bloggers” links to a 2008 report from Emarketer that costs $695 if you actually want to know how they got their numbers (I confess I haven’t made the investment).

“1.7 million profiting” links to a promotional page for BlogWorld Expo that cites no source at all for its data.

“452,000 of those using blogging as their primary source of income” is drawn from a Mediabistro rewrite of numbers from Technorati’s State of the Blogosphere reports. Technorati’s are the longest-running and most valuable, and consistent, series of blogging studies over time, but like any study’s numbers, they can be easily misrepresented: here, Penn relies on them for the datum that bloggers who reach 100,000 uniques a month can earn $75K a year. But if you read the source, you find this:

The average income was $75,000 for those who had 100,000 or more unique visitors per month (some of whom had more than one million visitors each month). The median annual income for this group is significantly lower — $22,000.

In other words, the $75K average is skewed by a handful of outlier successes, but the great majority of bloggers who get 100,000 uniques/month earn more like $22,000. Here, the median is far more relevant than the average. Penn, of all people, knows this.

Later on, Penn’s piece cites other sources, including a Pew study and this iLibrarian post which references a 2008 study by an outfit called BIGResearch. The BIGResearch study particularly flummoxed me as I was researching my book, and in email correspondence with a company representative I got to the root of the oddness of their numbers: Their study defined “blogger” as, basically, anyone who writes or reads a blog. That’s one way to muddy the waters!

The methodology of Penn’s piece seems to be: gather as many numbers as you can and don’t worry about the fact that they are from many different sources at different times using different methodologies and even differing definitions of what it means to “be a blogger” — just toss them all together and start drawing conclusions. Those conclusions, in turn, seem to be based on a misapprehension that bloggers are by definition opinion writers. Many are, to be sure; but many others — particularly in the “pro blog” world Penn focuses on — concentrate on becoming expert sources in a particular area, or informational services, or link reviews.

My suggestion to Penn (who — full disclosure — I briefly worked for, decades ago, during my college years, when he was starting his company): You should commission a real study of blogging, using real sampling techniques, and share the results with the world. No one has done this yet that I’m aware of. You know how to do it! And we’d get a lot better information than this crazy-quilt pastiche of mix-’n'-match stats.

UPDATE: Penn has posted an addition to his column that goes into more detail about the numbers. “I was surprised at how few studies there are on this,” he writes, “and I believe there definitely should be more. So perhaps in the future I will do some original research, but for this piece we took the best we could find and referenced every number so people would know where they came from.”

Returning from a mostly-offline spring break vacation, I find that the future-of-news debate has been going round in circles. In the most interesting turn of the wheel, Nick Carr weighed in with an elaboration of his argument that Google is a vampirical middleman, sucking the lifeblood from the media industry. His take on this trope is more sophisticated than the usual “Google took our ads, make them pay!” line from the newsroom diehards, and worth a look.

Carr quotes the point I made recently — that participation in Google’s search engine is voluntary, and any news outlet that wishes to opt out can do so easily — but suggests that this is an oversimplification:

When a middleman controls a market, the supplier has no real choice but to work with the middleman — even if the middleman makes it impossible for the supplier to make money. Given the choice, most people will choose to die of a slow wasting disease rather than to have their head blown off with a bazooka. But that doesn’t mean that dying of a slow wasting disease is pleasant.

The problem with Carr’s middleman theory is that it, too, is an oversimplification. It presupposes that the problem news organizations have with Google is that it “gets between them and their readers.” This assumes that the readers were already visiting the media company websites, and Google is interposing itself. But anyone who’s ever looked at a media website traffic report knows that most often Google traffic actually represents something precious for media businesses — new blood, first-time visitors, what the direct-marketing business calls “qualified leads.” In other industries, the media companies would be paying Google for that traffic, but Google gives it away for free.

In fact, media companies are not end-parties to transactions that Google is interfering with: they are middlemen, too, and in more than one kind of transaction. They sit in the middle between readers and the information readers seek; they also sit in the middle between advertisers and the customers those advertisers seek to reach.

Carr, standing in the shoes of the aggrieved media executive, sees Google as stepping in between the media outfit and its readers, grabbing a cut of the revenue. But put on the reader’s shoes and things look different: Google isn’t introducing an additional middleman layer but simply substituting its own, newfangled method of connecting readers with information and advertisers with readers. And if that version happens to suit the medium of the web and win the allegiance of readers, what right do media executives have to our sympathy, or to a “fair share” of Google’s revenue? They had decades to become Google themselves if they chose to.

Carr paints Google as a conventional middleman — an extractor of existing value. But Google, with its efficient, targeted text-link advertising, has actually added value to pages that previously could not be valued at all. Sure, media companies wish they’d done that themselves — I wish I’d done it, too. Now that Google has done so, they have a right to their chagrin; but they don’t have a right to a cut.

So yes, Google is a middleman of sorts, but not in the way your car dealer is a middleman. It doesn’t buy cheap goods from a supplier to mark up for a consumer. Its role in the economic system of the Web has been fundamentally additive: it has (at least in terms of its primary product, the search engine) contributed new value rather than skimming existing value.

This is when the Google Tax crowd cries, “But Google News is stealing our headlines!” Let’s put aside the fair-use argument for a minute and also defer the “incoming links have their own value” point. Even if the “Google News is theft” people were right, they are fighting over (relative)crumbs. News people who focus their ire on Google often choose to eye the company’s vast profits, mostly earned from its enormous search traffic, and then — in a rhetorical dodge that is either ignorant or disingenuous — pretend that most of those profits are earned from Google News.

In truth, Google News is an interesting but relatively small experiment to assemble a news page via algorithm rather than editor. As Google CEO Eric Schmidt seemed to admit to Maureen Dowd last week, that experiment has to date been a failure:

When I ask if human editorial judgment still matters, he tries to reassure me: “We learned in working with newspapers that this balance between the newspaper writers and their editors is more subtle than we thought. It’s not reproducible by computers very easily.”

The relevant point about Google News is that it represents a tiny sliver of Google’s business — it’s a pimple, at best a big pimple, on the balance sheet. I’m sorry to break this news to all the editors and publishers who are clamoring for a share of Google News’s revenue, but they should know that money is not going to save their businesses. And if what they’re really demanding is that Google give them a share of its total search-based revenue for the right to use headlines and snippets of news articles in Google News, then they’re batty. And they have no leverage, because Google can rightly say, “You can walk any time you wish.”

Many newspaper people seem to be under the impression that if Google, and Craigslist, and (fill in your favorite Web shibboleth here) had never been invented, then everything would be OK, and they would be free to transplant their old business model into the new medium. This is delusional. If Larry Page and Sergey Brin hadn’t invented a search engine that really works, and wedded it to a targeted advertising system, somebody else would have. If Craig Newmark hadn’t built a community of free classified advertising, somebody else would have. These functions are made possible by the nature of the Web, and they were both visible and inevitable by 1997 or so. It is the Web itself that unbundles the media industry’s products and undermines its old business model, not the actions of the handful of innovators who saw the Web’s potential and built on it.

Carr takes a long cynical view, arguing that everything will calm down and the media business will recover once the news industry’s present overproduction crisis ebbs and scarcity returns to the information marketplace. This is, for instance, what my old boss Steve Brill is trying to do with his latest venture. I wish him luck, but I think it will be a total failure. It is only the latest genie-stuffing exercise in a world where the bottle itself is busted.

Scarcity will never return to the information marketplace, at least not in its old familiar broadcast-era form. It is too cheap to distribute news today. Producing certain kinds of news remains a costly undertaking, and we’re still figuring out new models to support it, in a rocky transition that is rightfully causing a lot of nailbiting. But those new models are unlikely to resemble the ones that worked in an era when distribution could be controlled by the producers themselves — when the media executive could control both production and distribution and dictate terms to both readers and advertisers. And whatever new models emerge, they are unlikely to provide last century’s monopoly profits.

The Web of Google, Craigslist and you and me is certainly a less hospitable place for the New York Times and CBS and Rupert Murdoch. But in the long run it will be a more interesting, more diverse and healthier environment for the rest of us. In some ways it already is.

See also Mathew Ingram’s response to Carr, in which he offers a parallel argument that Google’s middleman “power” doesn’t reduce the power of content producers but instead amplifies it.

It’s turned into the silly season here in future-of-journalism land, what with the AP’s muddled new campaign to try to stop websites from linking to its content and the latest wave of cockamamie plans to save newspapers by (take your pick) putting them on the government dole, seizing some of Google’s profits to pay their bills, or organizing a sort of journalistic OPEC to begin jacking up the price of news online.

There are a few important facts that always seem to get lost in the broadsides that present these save-our-papers plans. One of these regards Google, which is widely seen among old-school journalists as the evil force that ate the newspaper industry’s profits by stealing its headlines without paying for them. The truth is that any newspaper website — indeed, any website at all — can stop Google from linking to it by adding a simple line of code to their “robots.txt” file that tells the Googlebot to go away. If you don’t understand what that means, it doesn’t matter; all you need to know is that participation in Google is voluntary.

Participation is also pretty much universal, because of the benefits. When users are seeking what you have, it’s good to be found. Newspaper sites, like most sites, don’t generally go the “robots.txt” exclusion route because they want Google to send people their way. But no one, Google or otherwise, is forcing any news organization to allow Google to link in.

The Google traffic is generally welcomed because it’s usually newcomers — site visitors who aren’t already part of the regular audience but who might become regulars if they like what they see. Over at the Wall Street Journal — the one major newspaper that has built a significant business out of charging for its articles — this influx of Google-directed eyeballs is apparently so valuable that the newspaper will actually slice a hole in its pay wall for Google-referred visitors to walk right in.

None of these realities seems to weigh in the scales for the new wave of “stop giving away the news” visionaries. Today’s entrant, newspaper consultant John Morton, writing in the American Journalism Review, is no different from his predecessors. Morton wants to see all American newspaper websites decide to shut their gates to non-paying visitors on July 4. Just organize this cartel and watch the profits return.

In reality, such a move would be suicidal: it would decimate these sites’ traffic while only marginally increasing their revenue. It would also hasten the evolutionary development of alternative, Web-only news organizations and business models that will be entirely disconnected from the old world of paper.

What all such plans fail to understand is that no website can succeed unless it is participating in the core activities of the Web — linking and sharing. These activities are not diverting bells and whistles; they are the heart of the medium. When you cut yourself off from the rest of the Web you’re not just giving up some minor side-benefit; you’re abandoning the fundamental distribution model of the medium — like publishing a newspaper but leaving it on the truck.

This is dead-end thinking. If you don’t believe that, ask the Wall Street Journal’s editors why they let you in for free when you click on a Google link.

One of the points I make in Say Everything is that the reverse-chronological format that blogs use is embedded in the DNA of the Web from early high-profile uses in places like Tim Berners-Lee’s first website at info.cern and in Marc Andreessen’s NCSA What’s New page.

Today’s NY Times op-ed page features a great piece by Stephen D. Crocker that explains the history of the Request For Comment or RFC — the format the architects of the Internet used to promote the development of the open, extensible, cross-platform standards on which the Net as we know it today was built. RFCs were pragmatic and humble; the proponent of some new standard for computers to work with one another would put it out in public — at first, before the network itself provided an easier means of circulation, in snail mail — and take in critical comments and suggestions for improvements.

You could see this practice as the genetic foundation for the comments that today are a feature of nearly every kind of page published on the Web. Just as blogging’s reverse-chronological sequencing has its basis in the earliest structures of web pages, Crocker lets us see that the practice of adding a comments thread to blog posts can also be traced back to the early history of the Net.

In this sense, every blog post is, in its way, a “request for comments.”

In early 2000 I got a call from a producer at Fresh Air, asking if I’d like to contribute some technology commentary. Fresh Air is, to my mind, one of the very best shows on radio, so yes, I was excited. For my tryout, I wrote a brief piece about this newfangled thing called MP3 that was just beginning to gain popularity. We’d been covering the MP3 scene at Salon since 1998, but it was still a novelty to much of the American public. I went down to KQED and recorded it. As far as I knew everyone liked it. But it never aired. I had four-month-old twins at home and a newsroom to manage at work. I forgot all about it.

In a recent file-system cleanup I came across the text of the piece and reread it, and thought it stood up pretty well. The picture it presents — of a future for music in which its enjoyment is divorced from the physical delivery system — has now largely come to pass. But at the time I was writing, the iPod was 18 months or so in the future; the iTunes store even farther out; the “summer of Napster” still lay ahead; and the record labels’ war on their own customers was still in the reconaissance phase.

Here it is — a little time capsule from a bygone era, looking forward at the world we live in today:

The phonograph I had as a kid played records at four different speeds. 33 was for LPs, 45 was for singles. There were two other speeds, 16 and 78, but I had no idea what they were for — they made singers on regular LPs sound like they’d sunk to the ocean floor or swallowed helium. Later I learned that the 78 speed was for heavy old disks, mostly from the ’20s, ’30s and ’40s; I’m still not clear what 16 was all about.

These old-fashioned playing speeds represented what, in today’s era of rapid obsolescence, we’d call “legacy platforms” — outmoded technologies that are no longer in wide use. The phonograph itself became a “legacy platform” in the 1980s with the advent of the compact disk. Now it’s the CD’s turn, as the distribution of music begins to move onto the Internet.
(more…)