Bronte Media

Forget the cross town rivalry and go straight to this: “The [New York] Post has also pulled ahead of the Washington Post, making it the fifth largest paper in the country.”

Startup Review, which recently has reviewed the early days of a few direct marketing firms like advertising.com and Homegain, wrote about mortgage lead gen firm lowermybills this week.

Good background but not too much detail of the nuts and bolts. C’mon Jay, give the people what they want - a real history of lead gen firms and their critical success factors.

Seth Godin weighs in on mmmzr, after he initially pointed to the site and several people referred to it as a ponzi scheme or pyramid marketing. It’s true about the latter, it is a pyramid marketing scheme, but a sustainable one (as Seth points out Ponzi schemes by there definition aren’t sustainable because of the promises they make).

I call it a game of advertising chicken and love the creativeness of the guy who created mmmzr.com.

Go check out this list of Digg-like sites. And they didn’t even include realestatevoices.com.

You have to love the family fighting within Tribune. First the editor and publisher of LA Times revolt. Then the publisher gets canned. And now the paper paints its parent in the most unflattering light. Editorial ‘integrity’ indeed.

There are usually two words to describe exactly the same thing. In the search world crawl is a positive word and scrape is a negative one and each describe the fetching of a page to index. You can be arrogant or confident. You can have a conflict of interest or have synergies. And so on.

Perhaps the newest is viral marketing. It’s good to be viral. It’s bad to have a pyramid scheme.

An interesting idea is mmmzr.com, a site that let’s you buy links and then if people after you buy links you get a refund and if two people buy ads after you then you double your initial outlay. Here’s the experience of one advertiser who bought in at $8.

I love it. Just as a social experiment in seeing where the fun stops as the stakes get higher. The site is almost like a game of advertising chicken. Even funnier is the story of the Japanese guy behind it.

Because of the structure of the payouts he effectively receives 25% of the top bids for the columns. So at the moment, he has made roughly $512. The site looks like it launched in the last few days, or maybe it was the Seth Godin post that got things started.

For those who thought the million dollar home page was a one off novel invention, think again: the currency of links and especially links from a page that has received a lot of publicity will always have value in a world ruled by Google. And publicity stunts will never go out of favor.

Regular readers of this blog know that I’m intrigued by the economics of free 411. I first did some guesswork here which I followed up here after Lyn Chitow Oakes, SVP Marketing, Jingle Networks followed up with some thoughtful comments.

A little more was revealed on a podcast by Michael Arrington with the CEO George Garrick. Specifically, Jingle currently has costs of around $0.25 per call, and revenue of $0.20. Around 60% of calls are operator assisted and the average call length is 90 seconds.

From the second part of my analysis, it appears that I was nearly spot on. I was slightly too conservative on the costs and slightly too conservative on the revenue. But basically in the same ball park.

I got a note from a PR person from Compete.com around their relaunch into an Alexa competitor err or is that Hitwise competitor? (p.s. as an aside I went to their site to find a link to a release but couldn’t find anything but a blog post that pre-announced the news last week. So did they really launch today or last week? An existential PR question to be sure).

Compete.com was founded by Bill Gross around social search (i.e. user clicks result, click recorded, result gets promoted for that search). It also has a toolbar used by 2 million people, where the company is collating its user data from.

Unlike Alexa or Hitwise it is making Unique Visitors an absolute number rather than a relative one (reach per million, percentage of traffic etc.).

The data appears to be cleaner than Alexa, presumably because they can balance demographics and not overcount nerds like Alexa does.

Basic trafic data is free. What is more valuable is things like search term volumes that appear to be converting for certain marketers. They would be worth their weight in gold and a service I am sure that compete.com is planning on launching/charging for but first building their brands through bloggers changing their default audience measurement reference from Alexa to Compete. Interesting to see how they do.

Peter Krasilovsky points to Tribune disclosing that 80% of its online revenue is derived from classifieds versus display. There are two observations from this: 1) search based business models win in the online advertising world and 2) If I am a journalist, I’d think about a career change right about now.

As Peter points out, although classifieds represent around 34% of revenue they roughly account for 50% of profit in the offline world. But I think the assumption that the same split online will play out is wrong.

More likely classifieds will continue to account for the majority of revenue and more than 100% of the profits (i.e. they will fund some journalism).

The reason why is that the Internet is fundamentally a direct marketing medium. I don’t mean that in a strategic classification, I mean that when an advertiser spends $ on the Internet, they expect a financial conversion event to be met. There are too many stories in the mainstream press on companies like Ford and Coke and Procter and Gamble. They mean nothing to the online advertising industry. It is Lowermybills, Vonage, Netflix and other direct marketers that buy out the vast reserves of online inventory.

Further drilling down into the classifieds representing 80% of online revenue, I would not be surprised if Careerbuilder represented 80% of Tribune’s classifieds revenue. Long time readers know that I am in love with Careerbuilder. Indeed, their stake in the firm could be nearly worth the entire $8bn that Tribune will be nearly sold for.

The Internet has made classifieds better and has not as yet measurably made journalism better. That in itself should account for different distributions.

Is it just me or is listening to a Google earnings call like a form of Chinese water torture? Would someone please provide a fucking direct answer to the questions! Granted some of the questions aren’t much better but come on:

“We think quality is great”. “We have been successful in Germany”. “Users can edit word documents online now”. “Our aim is to help users”. “Happy birthday Omid”. Enough already! I can’t take it! Give me some Barry Diller, OIBA and an excel spreadsheet!

It is true that Google is the most fantastic media firm ever created. And that it is perhaps the greatest financial success of any company of all time. But they still operate in the same world and under the same laws of gravity as the companies they compete against.

Henry Blodget, mistakingly called a bear on Google, makes a great case for why it inevitably has to slow down at some point. My guess it is when people stop refinancing their mortgages or more correctly, use search less than they do now as a starting point for searching for a mortgage.

The most amazing thing to me was that the growth was driven by core search revenue on google.com. In fact that is what drives nearly all the cash flow. Surging international revenues have contributed some, but growth in US revenue is still continuing to blow away expectations. (Side note: why was all the talk about other Google products when the collective community still has zero idea about why core search is continuing to grow so fast at Google and not others?)

Understanding the core search revenue is key to knowing when Google itself will slow. I don’t think they will derive any meaningful profit from other products in the next two years. So let’s take a re-look. I think the fact that at some point bids stabilize to a fair value and marketers discover all the keyword phrases appropriate for their category still holds. From there, improvements in conversion rate and growth in online commerce will buoy the industry but at more ‘normal’ growth rates.

People have been wrong about the timing of that maturation. Myself included. But at some point it inevitably has to come.

If you look around the online ad industry at the moment, traditional display advertising at AOL is actually shrinking (growth is solely from ad.com and the search deal with Google). MSN revenue is flat. Yahoo has fallen from grace. To me, it is simply a matter of time before Google has to be subject to the same laws of the land. Their supremacy and superior execution have given them a time reprieve but I think the argument has to be about the ‘when’ rather than the ‘if’ the same laws are applied to Google. How is that being a bear on Google?