Publishing 2.0 -- it's not what you think.

Photo by Dan Farber, ZDNet

Great post by Dan Farber about the new Publishing 2.0 empires (OMpires?) being built by Mike Arrington, Om Malik (aka GigaOM), and Rafat Ali.  Previous mini-empires by Jason Calacanis & Nick Denton have already proven lucrative.  And Mr. Battelle wants to help turn all their clicks into gold via FM Pub.

However, i think people assume both too much & too little about the possibilities of online content.

Let me explain...

Most folks who have some familiarity with today's offline publishing businesses assume those companies are the living dead -- large but ailing, slowly crumbling behemoths with millions of readers, gradually turning into less-and-less millions.  These dinosaurs built their revenue streams on classifieds and other advertisements, and business was very, very good for many years. 

Then in the late 90's, a number of things began shifting. Companies like eBay, Craigslist, Monster, and others started turning the classified business on its ear.  They could do the same thing online that newspapers & magazines did offline, except their overhead was MUCH lower... and their audience wasn't limited by geography or page count.  These new Internet 1.0 businesses grabbed some revenue from traditional news media, but since internet access wasn't ubiquitous in every household (yet), the old guard didn't notice much, and after the first dot-com bust they breathed a sigh of relief and continued to pimp overpriced want ads to barely-literate luddites.

But in the early 2000's, Overture (nee Goto.com) and later Google figured out how to make money by selling small text ads displayed alongside search results (and with AdSense, contextually-matched to non-search content users browse through).  Although this hardly seemed an earth-shattering innovation to many in the publishing business, it was notable for one very simple reason...

It worked. 

Suddenly, a very hard-to-measure CPM-based advertising world became dramatically threatened by a relatively-easy-to-measure CPC-based advertising world.  Why pay just for eyeballs (impressions), when you could pay for qualified leads (clicks)?  Why pay for mass marketing, when you only had to pay for the niche verticals that drove the highest customer value?  Advertising became measurable, and Marketing became [more of] a science.  And once CPA-costed ads arrive, we'll see even more defection.

Now there are more people than ever online, more people with Tivo, more people reading blogs & newsfeeds (tho they might not know it), and less & less people participating in plain old mass media / offline media.  It might not die tomorrow, or next year, but the new order has arrived.  And that doesn't mean that Rupert won't still find a way to make bazillions of dollars feeding you pablum, but now you'll have a bazillion flavors of pablum, in every shape & size.

Q: So where does this leave the Future of Publishing, aka Publishing 2.0?

A: Still not here yet.

The real meaning of Publishing Where No Man Has Gone Before is not, as many assume, the online equivalent of the Hearst Corporation.  The strategy of aggregating related content to drive up page views & viewership while driving down ad placement costs certainly makes sense, and although not terribly revolutionary, does work.

However, the true promise of the Web isn't just to move traditional classified models into the online world... it's to change the very nature of media distribution & advertising itself.  So wtf does that mean, dave?  well, i'm glad you asked.... stay tuned for Publishing 2.0 part II, coming up soon.

aaugh!  cliffhanger!

(UPDATE: here was my belated Publishing 2.0 Part II followup, however it's rather modest compared to the real story told more eloquently & intelligently here in Adrian Holovaty's piece on structured data & newspapers. Adrian is the creator of ChicagoCrime.org, and Django, and is a real genius. )

btw, if you haven't checked out Seeking Alpha, i highly recommend it.

(and yes Richard, i'm part of TeamGiga ;)

Comments

[Richard MacManus]

I'm on the edge of my seat! Excellent post, can't wait for Part 2.

Congrats on the GigaOm gig.

[Arron]

Great Post! About as succinct as I have ever seen "2.0" put.

[Robert Young]

Hey, it's been 10 days... when's part deux coming?? Eager for the follow-up... and hoping for some great insight!

BTW, thanks for commenting on my Jobs/YouTube piece today.

[hans gieskes]

Hi Dave,

You make some very valid points. Having been a publisher for the last 30 years, I've ofted berated my peers by saying "if you worry about the www screwing up your sweet business model - IT WILL!" More and more "old media" companies who did get this and the other ones which have survived by inertia are begining to succesfully leverage on the web what they have built for decades: brands. 99% of new 2.0 something players never get decades to build a brand on the fickle www, where one is only one click away from a competitor.

The real value of content gets established by the context in which the user finds it or uses it.

The only reason which could restrict "old school" media companies from seizing the opportunity is that most are public companies or private equity owned, which means much short term proft goal thinking. Sometimes on the www you have to think really long term, e.g. 18 months or so...