It’s About Revenue, Not Growth

That’s the lesson I feel like screaming at all the people acting like AOL’s much anticipated decision to “go free” and to give 5GB of storage to its users is a brilliant idea.

Growth without revenue or a realistic plan to generate sustainable revenue is nothing more than a way to create additional expense. It ends up on the wrong side of the ledger. Granted, this sort of charity will generate some headlines, as Marshall Kirkpatrick points out:

“From giving away many previously paid services free to broadband users (yesterday) to hiring away top social bookmarkers (first 10 announced today) and now throwing free storage at anyone who wants it – AOL is certainly making a lot of plays to revive itself.”

But it’s a clever head fake at best. If I started a business that gives away $20 to every person who walks by my house, I too would have a fast growing business, and I too would get lots of headlines. Perhaps even a link from Om. I would also run out of money pretty quickly.

AOL hopes all those users will click on ads and buy stuff so the loss of subscription revenue will be offset by more ad revenue. Nobody clicks on ads and nobody buys stuff because of all the ads people stick in front of their face. Entire industries are being built around ad avoidance (TIVO, satellite radio, etc.) at the very same time AOL is betting its future on the success of ads.

This move by AOL smacks of desperation. It is going to stop selling its service and climb on the back of the ad dollar along with 95% of the rest of the Web 2.0 world. In effect, AOL has just become an online newspaper, fighting for the same ad dollars as the rest of its Web 2.0 brethren- and the rest of the online and offline newspapers. In an effort to be like Google, it has put itself in the same predicament Google is in- the frantic search for eyeballs in the hope that somehow a little alchemy can turn those eyeballs into cash.

The myth of the infinite ad dollar is a house of cards I tell ya. And it’s going to implode one day.

Annoyingly, existing AOL users have to navigate through a maze to find out how to turn their account into a free account, and even at the end of the maze, you’re required to make a phone call and enter an even bigger, more frustrating maze. If free is so good, why are they making it so hard for people to be free?

Ted Leonsis of AOL does his best to spin this news like its some brilliant new strategy, as opposed to a recognition of the inevitable fact that the market for AOL’s paid services is shrinking. Mr. Internet chimes in with his take as well.

I can’t blame them for trying- they’re trying to make money, after all. But let’s take a closer look.

Ted Says:

The new plan is about growth. It is about changing the focus of our teams and resources. It is about having a green thumb and showing the world that we have green arrows pointing up in all of the key metrics that are important to our business. It is about a simple and logical statement of fact – AOL should never lose another customer to a competitor, and we should be able to expand rapidly on a global basis as the high-speed free Internet gains even greater momentum.

Mr. Internet Says:

Yes, yes, yes… it is so hard to run a business that has two different focuses. In our case the focus was keeping the dialup subscribers and building free services. These collide all the time. For example, today’s free 5 GIG of storage–the boldest move AOL has done since buying Weblogs, Inc and moving Netscape to social news–would have been a service reserved for our paid members. Then Google would offer it for free and our members would be paying for something they could get for free–again (just like email and IM). This constant back and forth is really draining for the members and for the executives. Smart people can make both arguments (free vs. paid), but at the end of the day you have to pick where the ship is heading and we’re picking free.

Common Sense Says:

If Dell started giving away its exploding laptops, it wouldn’t lose many customers to competitors either. Didn’t these guys take Economics 101? Picking free is only a good choice when no one wants to buy what you’re selling. And if no one is buying what you are selling, you aren’t a business. I’d change the word boldest in Mr. Internet’s post to most desperate.

Revenue, revenue, revenue. Sustainable revenue. Say it with me.

That word revenue is mentioned a total of 4 times in Ted and Mr. Internet’s posts. Four times in 2319 total words. And except for one vague mention of multiple revenue sources, it always follows closely behind the word ad or advertising.

Speaking of multiple revenue sources, I wonder how AOL’a dial-up customers feel about the fact that they get to keep ponying up their subscription fees while broadband users get the goods for free? I understand the logic behind this, as the demand for AOL from broadband users is likely small and getting smaller. But it still sounds like AOL is sticking it to the people who, AOL believes, don’t have as many options as broadband users. Many of whom are likely some of AOL’s oldest customers.

Like most, I learned the internet on AOL. I have been a defender of AOL in the past.

But this move looks like the desperate act of a desperate company.

Update: Dwight Silverman reports that you can now switch to the free plan online. I just did it and it was very quick and easy. Now at least I’m not paying for the AOL account I never use.

Blummy is Cool!

blummy_logo Somehow I’d missed all the talk about Blummy, until I saw Steve Rubel’s post today.

I was intrigued, so I signed up and gave it a try…and it is really cool. It’s going to save me some serious researching and writing time.

I have added Wikipedia lookup, Whois lookup, Alexa stuff, Google Blog search, IMDB search, the tinyurl maker and the Delicious playtagger add.

I wrote one for AllMusic.Com (it’s now available and is called allmusic).

Here are the other “blummlets” I will make shortly:

One for Allyoucanupload.com
One that will make an image link from any image

I am excited about Blummy. Give it a try.

Google and Firefox Go to the Dark Side

Google, looking for the its first hit in a decade and hoping to avoid the oldies tour, and Firefox, perhaps wanting to ratchet down all the love it has been receiving, have joined the Bloatware 2006 Tour, headlined by none other than Real Player.

The only reason I can think of why Google and Firefox would agree to partner up with Real Networks is because Real Networks isn’t Microsoft.

Note to Google and Firefox: Sometimes the enemy of your enemy is NOT your friend.

As of now, all of the comments to the Download Squad post linked above agree that this is a bad move for Google and Firefox. And all agree that Real Alternative should be used in lieu of Real Player.

I’ve long been on record as far as my opinion of Real Player goes.

Itchy Fingers in the Blogosphere

Amy Gahran has an interesting post today about the itchy finger syndrome- when you click the “Publish” button too quickly and post something to your blog that a moment later you wish you hadn’t.

She tells of this post by Dave Winer, which went through several post-publication edits, all of which were, for some reason, grabbed and posted by Ian Bettridge.

There’s a lesson here, as Amy suggests. But first a little related business.

I saw those earlier posts by Dave too, in my feed reader. But I didn’t save them, and I certainly wouldn’t post them. Anyone should have the right to reconsider what they write the same way they can reconsider what they say in a conversation. If I am arguing with Dave about something, I’d rather respond to what he says and agrees with than what he said and later retracted.

Back to the itchy finger.

As Amy points out, once you post something, it will get picked up by your blog’s feed. It will also often get picked up by Google and Technorati and sometimes by Techmeme and the other memetrackers. Once that happens, it is a part of the permanent record.

A related problem is that any modification to a post will generally go back into your feed as a new item. So if you do 3 edits to an original post, that post will show up in your feed 4 times.

While we all try to avoid it, everyone has to edit posts for typos, broken links, etc. from time to time, and this is viewed by most as an unavoidable part of the process.

But when you change substantive parts of your post, the original content is still out there in your feed. Amy is correct- there’s no way to get it back.

Having said that, I’m not sure that’s such a big deal in many cases. Had Dave been talking to us as opposed to posting, he very likely would have said the same sort of stuff, refining his stated position (stated being the important word there) as he thought about it and heard our reactions. He would have ended up at the same place, and we would have heard the evolution of his position.

As Amy points out, however, when you remove something because you have reconsidered your position, it’s a good idea to explain what you did and why. Having said that, I suspect Dave removed the post more out of a desire to avoid a hassle than a change of heart (I don’t want to get involved in this debate, but I will say that I did not find Dave’s original post objectionable and I think there is a marginal utility to extreme political correctness that is wholly lost to some.)

Avoiding an itchy finger is certainly a good idea when possible. But at the end of the day, blogs are about conversation. And most conversations start at once place and end at another. Even if you’re talking to yourself.

That’s not such a bad thing.

UPDATE: Amy has more thoughts about editing posts.

YouTube Wins Again

youtube Fresh from its win over MySpace in my Web 2.0 Wars championship, YouTube turns around and puts it to MySpace again with word that it has passed MySpace in the internet eyeball race, racking up a 3.9% share of internet visits compared to 3.35% for MySpace.

The GU sums it up nicely in a quote from some undoubtedly qualified guy from an almost assuredly important company (that is my tip of the hat to the gesture crowd, who can’t respond to my earlier debunking because (a) there is no valid response and (b) they would be admitting that they follow links if they did so, since they weren’t born with innate knowledge of my post any more that their readers were born with innate knowledge of their URLs):

“YouTube has a far more universal appeal, being pure entertainment with a global appeal.”

Amen, and congratulations to YouTube.

Debunking this Gesture Nonsense

Robert Scoble posts today about the gesture business Steve Gillmor has been talking about for some time now.

It’s time to debunk this gesture nonsense once and for all.

Scoble tells of how someone emailed him about a fire in Montana near the town where Scoble’s mom lived before she died. The emailer knew Scoble would be interested because he read Scoble’s blog posts from when he went to visit his mom when she was sick. Somehow the fact of this email explains and supports (at least to Scoble) the whole gesture business.

To call posted or emailed content gestures is the worst sort of nomenclature for the sake of nomenclature. It is “pre-owned cars” times infinity. The only algorithm you need to find these so-called gestures are the web addresses for Google and Technorati. The “information retrieval system” is in place right now, and it has been for years.

The fact that someone who knows Scoble has a connection to a town in Montana emails him a link to an article he might be interested in does utterly nothing to support some revolutionary gesture concept. This sort of thing happens a million times a day. To say that such an email supports the gesture business is like saying the fact the sky is blue supports the fact that I am the King of England.

Lots of people find out lots of things every day via emails and water cooler conversation before they read about it on Google or in the paper. All this proves is that people tell other people things they might be interested in.

More importantly, the gesture theory can be debunked mathematically.

Scoble says he doesn’t have to link to a post he mentions by Fred Wilson, because:

“I didn’t link to Fred Wilson’s blog. Why? Cause if you really cared you’d have read it by now, right? I assume my readers know how to use Google and TechMeme. Cause you’re smarter than me and I can find Fred in both places right now.”

and because:

“Yeah, Steve Gillmor explained to me why NOT linking is better than linking. Tell me Fred, did your traffic from search engines go up today?”

It is a mathematical certainty that at least some people who read Scoble’s post and are interested in what Fred has to say will NOT go to the extra effort to do a Google or Technorati search to find Fred’s post. So the gesture nonsense will frustrate not only those people, who could otherwise have accessed Fred’s post by clicking a link, as well as Fred, who presumably would like interested people to read what he writes. In sum, the theory that it’s better not to link to Fred’s post is void on its face.

It is self-serving bullshit dreamed up by some guys to support their efforts to recreate an internet oligarchy that is both outdated and inconsistent with the beauty and purpose of the new internet. In many ways it is the reaction of the old to the advances of the new. Somebody moved their cheese and they are trying to build a time machine to help get it back.

If you want further proof, ask yourself this question. Why is this gesture business being promoted in lieu of linking, as opposed to in addition to linking? Couldn’t linking and gestures co-exist peacefully? Of course they could. But not if you treat the blogosphere like the Winchester House and obsess on building it and rebuilding it to your tastes to the extent that you never get to the point of enjoying what you have built.

I can’t tell if Gillmor and his crew really believe in this gesture business, or if this is some L. Ron Hubbard-like attempt to meld science fiction and mythology into a new internet religion.

What I can say is that this gesture/non-linking business is the most extreme form of arrogance I have seen in a long time.

The bottom line is that these guys don’t want to link, and they are working like mad to create a philosophy that will support their refusal to do so. That or this is some epic inside joke at the expense of the rest of us.

Either way, the only gesture I see is some guys who, for one reason or another, have the microphone waiving their middle fingers at the rest of us.

In Praise of PostSecret

Most people who read my blog already know about PostSecret, but some may not. And I’m fixing to change that.

PostSecret is one of the most popular blogs in the world. Only is isn’t really a traditional blog. It’s one of those ideas that seem so simple, yet almost indescribably brilliant. It’s one of those ideas that you can’t believe you didn’t have, yet you know you never would have thought of it.

People anonymously send in the picture side of homemade postcards. Postcards that have a picture or drawing and a message. Something the sender wants or needs to say. It sounds dull, until you start reading them. Then it becomes incredibly powerful. Some of the images and messages are just routine observations. But some of them are stunning in their insight, their sadness, their remorse.

You have to see it to appreciate it, but once you start reading PostSecret, you will never stop.

Link Love on a Slow Night

Randy Morin thinks we should do a little chain linking on a slow night in the blogosphere. I’m game.

What you do is simply repost this blog entry as-is on your blog and add your website to the top (or bottom) of the chain of links below. Then email the blog entry to a couple blogger friends. For participating, you’ll get a little link love, a.k.a. Google juice.

1. http://www.kbcafe.com/iBLOGthere4iM/
2. http://www.newsome.org/

Update:

3. http://www.chipsquips.com/
4. http://tracytakespics.blogspot.com/
5.http://jack-of-all-tradez.blogspot.com/

Links & Comments: Another Badly Needed Application

I’ve already provided one roadmap to riches via my killer podcast application post.

But if you want to start on a slightly smaller scale, here’s another one.

Someone needs to build a cross platform, highly configurable online application that will pull recent inbound links from Technorati and Google blog search, weed out duplicates AND allow the user to select which ones appear in a list that can be easily added to a blog or other web page. It would be a centrally administered and more feature rich version of the list I manage this way. You could also do the same thing for a list of recent inbound comments (pulling the comments directly from the blog- not via a central location like coComment), and allow both lists to be administered from a single web page.

Why you say? Two reasons: spam and demand.

Almost every post of mine gets picked up by at least one spam blog and often 2-3 of them. Contrary to what Scott Karp says, Technorati is doing a ton better at weeding out spam links and keeping accurate link counts, but it is a full scale war, fought every day. Spam is like roaches, there is no way to keep them all out, and so you still have to rely partially on a kill them when you see them approach. That’s why Scott’s, mine and undoubtedly a ton of people’s link counts go up and down like the cast of the Gillmor Gang.

If I am having this problem, I am sure a lot of others are too. A quick survey of some other reasonably popular blogs confirms this.

If there was a way to validate the inbound links that show up in that list, sort of like you can do now with comments and trackbacks, it would allow people to weed out those links before they show up. And it would take away some of the incentive to spam.

People would flock to this program, and people would happily pay a few bucks a month for it. Look at all the great work done at Freshblog and other places trying to find a way to do things like this within the confines of various platform limitations. Give us one stop shopping, and we will give you money.

I’ll type my fingers off about it here, as would hordes of other appreciative bloggers.

Those of you lucky enough to be on WordPress may rightfully say that there are plugins that already do this for you, but there are plenty of people like me who are stuck in Hotel Blogger and elsewhere who would use it. Plus, we’re all about cross-platform, right? So if you build it well, we will come. From Blogger and from WordPress. From all over.

What are you waiting for. Go build it and I’ll get ready to send you my subscription fee every month.

Rumble in the Jungle 2.0

catboxing Now that Lee Gomes has taken the WBS (World Blogging Slugfest) belt away from Chris Anderson in convincing fashion (it’s really not about whether the book moved up the top seller list) we have another heavyweight bout brewing.

Mike Arrington, fresh from his all too brief stint as the blog rage eradicator, and having turned in his badge to rejoin the Gillmor Gang (hopefully with Nick Carr) at the behest of the most enraged of all bloggers (more on that below), takes on Nick Douglas of Valleywag fame over some emails Nick Douglas allegedly sent around inquiring if Mike is an investor in some startups, presumably to see if Mike has any secret investments in the companies he writes about.

I don’t know Mike, and I have been critical in the past of what I perceived at the time as a rock star attitude. But I have read enough of his posts to be very surprised if he invested in a company and then wrote about it without disclosing the investment. For one thing, Mike strikes me as an honest guy who, at least most of the time, can still remember what life was like before TechCrunch. I also know that Mike is an attorney – and I know that for him to do something like that would put his law license at risk. Whether he needs it to make a living or not, he probably isn’t keen on having it publicly jerked away from him.

So I would put the odds of Mike investing in a company and then writing about it without disclosing that fact at about zero.

And I suspect that Nick Douglas knows this as well. Which means that he either wrote these emails just to stir the pot a little (one of the many things to love about Valleywag is that it occasionally makes great fun of the so-called blogging elite) or for some other reason.

It’s the possibility of another reason that I find interesting.

Mike believes that Nick may be taking some preemptive shots in the face of greater competition from the TechCrunch family of blogs. Mike seems pretty angry about the whole thing and even tosses out the L-word (libel).

But there could be more to it. Nick told me tonight that Steve Gillmor called him and “advised” him to stop writing about Mike. Nick tells me that when he told Steve he was going to continue to look into these TechCrunch issues, Steve got huffy and ended the conversation by telling Nick he wouldn’t talk to him anymore.

Note to Mike: As stated, I don’t believe for a second that you secretly invested in any companies. But you can certainly find a better ambassador than your once and future podcast mate, Steve Gillmor.

This could get very interesting.

Update: Nick posts some thoughts at Valleywag.