The Praized Blog

Yesterday, Sophie Cousineau, a business journalist from Montreal’s La Presse, offered her explanation as to why Barack Obama had to fire Rick Wagoner, the CEO of General Motors Corporation (GM). She talked about some of Wagoner’s past successes but also the fact that he hung on too long to his strategy that centered on SUVs and trucks.

It struck me that with the GM situation, we are facing a perfect example of the innovator’s dilemma. Coined by Clayton M. Christensen in the book of the same name, the innovator’s dilemma is “a theory about how large, outstanding firms can fail “by doing everything right.” The Innovator’s Dilemma, according to Christensen, describes companies whose successes and capabilities can actually become obstacles in the face of changing markets and technologies. ” (source: mit.edu) Christensen also talked about “disruptive technologies”.

In GM’s case, they were so focused on their high-profit margin products (SUVs, trucks, minivans) that they ended up being blindsided when the easy credit required to buy these expensive vehicles evaporated and the price of gas went through the roof.  It also reminded me that sometimes you need to kill your cash cow before someone else does it for you (or said otherwise, it’s better to cannibalize yourself than have someone else do if to you).

Which brings me to traditional media (you knew I was going there, were you?).

Newspapers traditionally have been huge cash-generating vehicles but they now have clearly met disruptive technologies both on the reader and on the advertiser side. Basic news is a commodity and aggregators (like Google News) serve as destination site. On the advertiser front, classifieds revenue has been completely disrupted via the free model (pioneered by Craigslist) and online eyeballs do not monetize as well as print readers. That leaves an industry that’s questioning itself with many people wondering what will happen to it in the future.

Directory publishers have very good profit margins but, for most of them, 80%+ of their revenues still come from the print platform. The good news is there hasn’t been too many disruptive technologies yet but you always have to wonder what will blindside the industry. Social media and mobile should be top of mind IMHO.

TV networks and cable providers are still enjoying a successful ride with broadcast/cable television and are slowly starting to think of a post-broadcast world. Disruption there will clearly come from the ability for viewers to go à-la-carte on the Web (either through legit or pirated channels) and link back to their television set. A startup like Boxee is trying to crack that nut.

What it means: the GM and the newspaper industry examples definitely show us that smart people, doing what feels like the right thing, can lead whole industries to catastrophe. What should media companies do? As Clay Shirky said recently “If the old model is broken, what will work in its place?” The answer is: Nothing will work, but everything might. Now is the time for experiments, lots and lots of experiments, each of which will seem as minor at launch as craigslist did, as Wikipedia did…”

I recently wrote a message on Twitter saying that I was “thinking that newspapers are looking more and more like magazines. And magazines are looking more and more like books.” That thought came out of the following realization:

• Newspapers are trying to stay relevant by doing more in-depth analysis and longer articles (the Focus section of the Globe & Mail is a perfect example). They’re slowly morphing into magazines.
• Magazines are still focusing on long articles and analysis but are also doing special topical issues. For example, Philosophie magazine recently published an amazing issue on twentieth-century philosophers. Monocle magazine’s about us section says its “More of a book than a magazine, Monocle’s designed
  to be highly portable (it’s lightweight and compact) and collectable (it’s thick and robust)”. They’re slowly morphing into “books”.
• For many people, microblogging is replacing blogging. I had detailed that new phenomenon in a recent blog post.

I also received a couple of responses to my Twitter message. Bruno Boutot said “.. and tweets like blogposts?”. Dylan Fuller added “I
expand blogs R now newspapers or niche ‘zines… thus newspaper to mags to books. what R books becoming? perfect & timeless”. To which I replied that I agreed and that “books are permanent reference markers in time.”

A typical reaction to new competition is to add value to your product, to avoid becoming a commodity and having to fight on price only. I think we’re seeing that reaction on the whole “news” value chain.

1. Microblogging is replacing blogging (expressing your thoughts)
2. Blogging is becoming newspaper-like (more reporting)
3. Newspapers are becoming the new magazines (more analysis)
4. Magazines are becoming book-like (more permanent reference material)
5. Books are still relevant as reference material

Have you seen the same thing?

According to this study done by the and ComScore, local searches online are growing at a faster pace than regular Web searches. Year over year, local search volume grew by 58% (vs. 21% for regular search) for a total of 15.7 billion searches. This represents 12% of all searches at the top 5 search portals.

In addition, “Internet Yellow Pages and locally-focused online business directories also saw double-digit growth of 23 percent in the same period, totaling 4.6 billion searches in 2008. ” The press release adds: “75 percent of the top 100 keywords searched on Internet Yellow Pages sites were non-branded, indicating that a majority of consumers have not decided on a specific company or product brand when they begin their search. ” One last data point: “nearly half (45 percent) of Internet Yellow Pages and local online directory searchers made an online purchase in the fourth quarter of 2008.”

What it means: The discrepancy between local search and online directory search growth means two things. First, that directory companies still need to play catch-up in terms of user relevancy and branding vs. search engines. Second, that search engine optimizing your local directory content is still critical to get found in regular search.

I’m also a bit disappointed at the number interpretation in the press release. To start with, on the non-branded keyword stats, I don’t think you can infer that people are mostly searching on non-branded terms when they use an online directory. We would have to look at total search volume to properly interpret those numbers, not the top 100 keywords. Obviously, top keywords will be generic terms (more people search for the word restaurant than the name Joe’s Pizza). But I’m convinced the sum of all business name searches is certainly higher than the sum of all keyword searches. It’s basic long tail theory.

The second data point (online purchases by online directory searchers) is nice but it would have been better to compare it with local search “searchers”. I’m convinced data shows that online directory users end up purchasing at a higher percentage than search engine users but we don’t know for sure.

One of my ex-Ubisoft colleagues, Frederick Brassard, reached out to me yesterday. Fred is a headhunter specializing in videogame recruitment and he would like to leverage Twitter to promote his services. He asked me a very simple question: how can you get more Twitter followers? As I often get that question, I figured I would write something taking Frederick as an example (with his permission).

First, Fred should create a Twitter account using either his real name or the name of his company. He should upload a nice picture of himself or the logo of his company (depending on his “branding” choice he made earlier). He should put the various locations (Montreal, San Francisco, etc.) he serves in the “location” field. He should insert a detailed bio of what he does and what he can do for prospective recruits and he should link to his corporate blog (if he has one). Finally, he should create and upload a nice background image supporting his corporate image strategy.

Once he’s created his Twitter account, but before he starts following anyone, he should start ”tweeting” about things that will interest the people he’s trying to attract to his practice. In this case, I believe he’s trying to reach existing or prospective videogame graphic artists, developers or game designers. Fred could talk about the following topics:

• Trends in videogame recruiting (hottest job positions, salary trends, etc.)
• News from the companies he recruits for
• Announcement of projects he’s trying to recruit for or that he’s recruited for (previews, games “going gold’, launch, positive reviews, etc.)
• General videogame industry stat (yearly sales, growth potential, etc.)
• Conferences he’s attending (GDC, etc.)
• Positions he’s trying to fill
• New blog posts (if he has a corporate blog)

Fred should be regular (maybe write 3 to 10 messages a day, every day of the work week). His tweets should position himself as “The” expert in videogame recruiting, answering questions from prospective recruits and counseling people on how to make career changes or career moves.

Once he’s “tweeted” 10 to 20 times, he should start following in Twitter all the people he’s been in contact with over the last couple of years by using the “Find on other networks” function. This will scan his e-mail addresses in Google, Yahoo!, AOL and/or Hotmail and it will match existing Twitter users with current contacts. Because these people already have a relationship with Fred, they will reciprocate the follow if they find the “tweeted” topics interesting.

Then, once he’s built a solid base of followers (at least 100), Frederick should use a site like Twellow.com to find new prospects. Twellow allows you to search for the information found in people’s bios on Twitter.  Fred could find people that work in the industry but that he doesn’t know. He could find interesting talents that do not work in videogames but that fit the profiles he’s looking for. And he should start following all these people.

Using Twitter can definitely help you professionally. It takes time and you need to be regular but I believe it can enable you to reach out and create even more awareness around your personal brand. And it can lead to actual “sales”. If Fred’s company doesn’t have a corporate blog though, I would also start blogging. But that’s another story…

Today’s edition of USA Today has a great article summarizing the opportunities and challenges facing the newspaper industry. Some of the important highlights and data points:

• “At least one city — possibly San Francisco, Miami, Minneapolis or Cleveland — likely will soon lose its last daily newspaper, analysts say.”
• “About 80% of newspaper revenue comes from advertising, and the Newspaper Association of America expects those sales to drop 9.7% in 2009 to $34.2 billion, after falling 16.5% in 2008.”
• In addition to the closing of the Denver Rocky Mountain News and the transformation of the Seattle PI into an online-only venture, “The Detroit Free Press and The Detroit News announced plans to cut home delivery to three days a week beginning March 30 and urged readers to go online to follow the news on other days.”
• “Virtually every major newspaper announced staff cuts.” and “Those keeping their jobs have seen salaries cut.”
• “Most large publishers also are straining to pay off heavy debt they took on before the economy fell into a tailspin.”

But not everything is doom and gloom:

• “Nearly half of all adults read a newspaper every day and spent $10.5 billion last year to do so.”
• “The average newspaper generates about a 10% profit margin.”
• Newspapers in large urban areas are suffering more than the ones in smaller cities
• Newspaper organizations are experimenting. Those “include The New York Times‘ plan to enlist journalism students to help cover some neighborhoods in Brooklyn and New Jersey. The East Valley Tribune in Mesa, Ariz., recently began to offer free home delivery four days a week to neighborhoods with families that appeal to advertisers.”

Some additional data

• Newspapers ” typically charge about $25 for every 1,000 people who might see an ad covering one-third of a page.”
• “About 85% of a newspaper’s costs go to things such as presses, paper, ink and trucks.”

What it means: it’s the first article I’ve seen in the last few months that’s really balanced and talks clearly about the issues facing the industry, some of the opportunities available and thoughts on the future. A must-read for anyone wanting to catch up to the industry.

Day 1 of the Kelsey Group’s MarketPlaces 2009 conference. Jeff Berman, President, Sales & Marketing for MySpace, was on stage for a keynote address.

Of note in his presentation:

• Jeff described MySpace as a “social portal” halfway between a portal and a social network
• 40% of online moms in the US are on MySpace each month
• Their classifieds section, powered by Oodle, generates 500K postings a month
•  They’re recently introduced MySpaceID, their equivalent of Facebook Connect or Google FriendConnect
• When asked how do they differentiate MySpace from Facebook, he answers that Facebook is a social utility, a very powerful, elegantly designed, communication platform. But that there are no licensed music content and no licensed video content in it like you find in MySpace.
• When asked “what is your USP?”, Berman said ” Massive content platform, social discovery around music”.
• When asked if they’re interested in “local”, he started by replying that they’re careful before they go in a space because they don’t want to upset their large user base. They need the right model. They also need a foreseeable revenue component but he did say local was interesting to them.
• Questioned about their target market, the MySpace exec said “everyone”

Here is the Kelsey Group blog summary of the presentation.

What it means: a couple of thoughts. First, I got the feeling that MySpace is in this bizarre brand/product positioning situation. They’d like to be Facebook and embrace social networking to the max but they’re not there yet. At the same time, the music/video component of the platform is what makes it compelling to a lot of users. If you’re a new music group, you need to be on MySpace and personally, I often start my search on the site when I want to listen to new acts bypassing search engines completely. I also like the level of activity in their classifieds section. Not bad at all! Finally, on the “local” question, I decoded from Berman’s answers that MySpace is not going to play in “local” in the short term. They’re still trying to find a model that will work. So, what is MySpace? A music/video site? A social network? Given that they’re owned by News Corp, I think they should morph into a “social entertainment” destination and platform. The launch of MySpace ID (now available on Yahoo! by the way) should increase their relevancy in the social ecosystem.

According to CTV’s Chris Abel, CanPages.ca, the local search site of Canpages Inc., the independent Canadian directory publisher, has launched its own Street View feature. CanPages has partnered with San Francisco-based MapJack to deploy this technology in Canada.  Abel says it’s very similar to Google Street View but includes new features such as ”a fullscreen mode and paths that explore pedestrian walkways as much as they do the streets ruled by cars and trucks.”

You can see it in searches in Vancouver, Whistler, or Squamish (all in British Columbia). As for future expansion, “the company plans to expand to include Street Views of Toronto and Montreal next, followed by as much of Canada as possible.”

In the last few days, an ad for a video camera operator has appeared in a Quebec job site, making people think Google was going to capture Quebec City in Street View. It’s possible but I suspect it might be an ad for the first French Canadian street view deployment of CanPages.ca.

What it means: looking at the introduction of new features inside the CanPages.ca site in the last 6-12 months, it’s clear that the exec team there has identified feature gaps inside YellowPages.ca, the main property of Yellow Pages Group (and directory incumbent in Canada) and are trying to differentiate themselves via those new features. It’s a good strategic move. On the other side, YPG has a mapping agreement with Microsoft and I’m fairly certain the Redmond giant is also taking street view pictures (many people on Twitter have reported seeing the Microsoft vehicle taking pictures). This will certainly be easy for YPG to deploy once it’s available in Canada. As I reported a few weeks ago, the new DexKnows.com has a nice integration of Google Maps and Street View.

“Basically, we move from a world of declarative identity, which decays, to one where you’re renewing yourself based on what you DO” (i.e. Performative Identity)

Chris Messina on the importance of “open” activity streams protocol in his presentation “Activity Streams & the social networking malaise“

I thought it was a good opportunity today to list the next three events I will be attending.

1) The first one is BIA/Kelsey ’s MarketPlaces 2009 conference in Los Angeles. Definitely looking forward hearing Jeff Berman (President, Sales and Marketing at MySpace) talk about verticals and local, Jay Herratti (CEO, Citysearch) discuss the latest Citysearch initiatives (maybe some fresh Facebook Connect data?) and Chris LaSala (Director of Local Markets, Google) talk about any Google Local initiatives. The conference is on March 16, 17 and 18 (yes, in 10 days!) at the Hyatt Regency Century Plaza.

2) I will also be attending this year’s Yellow Pages Publishers Associ conference. Believe it or not, it will be my first time after almost 10 years in the industry. They invited me to speak on a blogger panel with my friends Mike Boland and Greg Sterling. Can’t wait to hear Carol Johnson (COO, Sensis Yellow and White Pages) talk about “Sustaining Yellow and White Pages Growth” and Malcolm Gladwell talk about “Outliers”. The conference is April 26, 27 and 28 at the Sheraton San Diego Hotel & Marina.

3) Finally, a month later, I will be in sunny Barcelona at the EADP conference. I will be talking about “blended search”. Their line-up of speakers is amazing with many CEOs and Head of New Media divisions speaking at the event. The conference is May 28 and 29 at Hotel Arts Barcelona (probably the most beautiful hotel I’ve ever stayed in!).

If you want to sit down and chat at any of these events, send me an e-mail seb AT praizedmedia.com !